Meta has agreed to settle a case with US states over allegations that Facebook and Instagram are harming children and teenagers, but it comes with an unusual condition. The tech giant can avoid paying billions, depending on what changes its rivals make to their platforms.
As a part of the settlement, Meta has agreed to pay $12.7 billion over 10 years. And another $5.3 billion is contingent on whether Snapchat, ByteDance’s TikTok, and Alphabet’s Google and YouTube impose similar protections for children.
That means the headline figure of up to $18 billion does not necessarily reflect the amount Meta will ultimately pay.
Though there has been no immediate reaction to the matter from Snapchat, ByteDance’s TikTok, Google, or YouTube, the case puts pressure on how other social media platforms respond to growing concerns over child safety.
‘Restrictions will change social media experience’
Noting that no company wants what Meta faced in Oakland, Rob Lalka, a professor of practice in management at Tulane University, told CNBC, “I’d expect TikTok, YouTube, and Snapchat to make changes before they ever face that scene. These platforms depend entirely on being trusted, by parents, by users, by advertisers, and the settlement reflects a business decision about reputational risk, which now the boards of these other companies must also make.”
Adding to it, said James Speta, a Northwestern University law professor who specialises in telecommunications and internet policy, as reported by Reuters, “These restrictions will change the experience on Instagram and Facebook, and they are designed to reduce engagement.”
A Meta spokesperson said the company was “hopeful” Snap would make similar changes.
We want to get this right: Meta
Further, the tech giant denied wrongdoing in agreeing to settle. The total payout represents about three to four months of profit and about one month of revenue for Meta.
“Ensuring teens have a safe and productive experience on our platforms is an absolute imperative for Meta,” the company said in the blog post. “We want to get this right for parents and teens.”
Meta and YouTube lost in a social media addiction trial in Los Angeles earlier this year, where the plaintiff claimed her mental health was damaged by some of their addictive features
Meta also lost a separate case brought by New Mexico Attorney General Raul Torrez, after a court found that it violated the state’s child-safety laws and ordered it to pay over $900 million in penalties.