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Wait, Did Zuckerberg Get Off Easy? · Question Everything

0:00
Speaker 1: A few weeks ago, Meta looked like it was in
0:02
Speaker 1: deep trouble.
0:03
Speaker 2: Meta is back on trial in what could be the
0:06
Speaker 2: most consequential moment in social media history. This trial could
0:10
Speaker 2: change how teenagers and kids use the platform in the future.
0:15
Speaker 1: As a lot of you will know from listening to
0:16
Speaker 1: our show, I'm very interested in the recent wave of
0:19
Speaker 1: court cases against social media companies for hurting kids. There
0:22
Speaker 1: was the woman who won against Meta and YouTube in
0:24
Speaker 1: California earlier this year for millions of dollars for addicting
0:28
Speaker 1: her to their apps as a teen. And there was
0:30
Speaker 1: a trial we sent reporters to in New Mexico where
0:33
Speaker 1: Meta was ordered to pay nearly a billion dollars and
0:35
Speaker 1: make certain changes to its apps. These were important wins,
0:40
Speaker 1: but they were also kind of patchwork. The changes Meta
0:43
Speaker 1: was forced to make to Instagram and Facebook in the
0:45
Speaker 1: New Mexico case, for instance, they only apply in that state.
0:48
Speaker 1: And Meta's appealing in any way, so they could be
0:51
Speaker 1: delayed for years. The evidence that's come out in these
0:53
Speaker 1: cases is so damning. showing that Meta studied the teen
0:57
Speaker 1: brain to build features that would purposefully hook kids, and
1:01
Speaker 1: that Mark Zuckerberg himself made decisions to keep features despite
1:05
Speaker 1: knowing how dangerous they could be. What I was craving
1:09
Speaker 1: as a parent and as someone who covers this is
1:12
Speaker 1: a more comprehensive punishment for the company, and really an
1:15
Speaker 1: overhaul to their apps and their business that will stop
1:18
Speaker 1: them from doing it again. And it seemed like we
1:20
Speaker 1: could actually get that with a new trial that began
1:23
Speaker 1: in Oakland a few weeks ago. This was part of
1:26
Speaker 1: a giant series of lawsuits brought by nearly all of
1:29
Speaker 1: the U.S. states and territories. If the states won this case,
1:32
Speaker 1: the first of these child harm cases to be tried
1:34
Speaker 1: in federal court, Instagram and Facebook could have been forced
1:38
Speaker 1: to make big changes to their apps nationwide, such as
1:41
Speaker 1: removing the recommendation algorithm for all teens. And the numbers
1:45
Speaker 1: being floated for how much Meta would need to pay
1:48
Speaker 1: in this case ranged from $ 200 billion to to $ 1. 4 trillion,
1:54
Speaker 1: close to the company's entire market cap.
1:56
Speaker 3: The financial implications could be massive, billions of dollars hanging
2:01
Speaker 3: in the balance.
2:03
Speaker 1: Meta had tried a last-ditch effort to get this trial
2:06
Speaker 1: blocked by using Section 230, the law, of course, that
2:09
Speaker 1: has long shielded social media companies from trials over content
2:13
Speaker 1: on their platforms. But the Ninth Circuit Court of Appeals
2:16
Speaker 1: ruled against Meta. So the trial got going, and eight
2:19
Speaker 1: days in, Meta was on the back foot. Its executives
2:22
Speaker 1: were getting grilled publicly on the stand. There was a
2:25
Speaker 1: real possibility Mark Zuckerberg could be called. And then, right
2:29
Speaker 1: in the middle of the trial, as the head of Instagram,
2:32
Speaker 1: Adam Masseri, was testifying, came an announcement. Meta has reached
2:37
Speaker 1: a settlement in a landmark social media trial. The state
2:40
Speaker 1: settled with Meta, 47 of them, along with Puerto Rico, D.C.,
2:44
Speaker 1: and other U.S.
2:44
Speaker 2: Territories.
2:46
Speaker 1: They won some of what they asked for. Meta agreed
2:48
Speaker 1: to make certain changes. like limiting teens to two hours
2:51
Speaker 1: a day on Instagram and Facebook, turning off access at night,
2:55
Speaker 1: investing in better checks for users' ages, and allowing parents
2:58
Speaker 1: the choice to make their kids' feeds chronological instead of
3:01
Speaker 1: driven by the recommendation algorithm. Meta also agreed to pay
3:05
Speaker 1: $ 17 billion. Attorneys general across the country are selling this
3:09
Speaker 1: as a huge win for them and for kids. But
3:13
Speaker 1: I couldn't help but feel disappointed. It still feels piecemeal.
3:16
Speaker 1: A small modification here, another one there. rather than the big,
3:20
Speaker 1: drastic reimagining that seemed warranted. And it's not just me.
3:24
Speaker 1: Others have weighed in. This is still chump change. I mean,
3:27
Speaker 1: this is a company that makes a huge amount of money.
3:30
Speaker 2: It's like they just paid people to just keep on
3:33
Speaker 2: making death machines.
3:35
Speaker 1: The Florida attorney general, who is also suing Meta but
3:38
Speaker 1: held out from settling, called the payouts peanuts. Meta's stock
3:42
Speaker 1: rallied after the settlement, enough to pay for the $ 17 billion.
3:46
Speaker 1: What's more, Arturo Behar... a whistleblower from Facebook who testified
3:50
Speaker 1: for the states in this case, said after they settled
3:54
Speaker 1: that the changes the AGs got wouldn't have prevented many
3:57
Speaker 1: of the teen deaths that have been blamed on social media.
3:59
Speaker 1: The good way to think about what happened is we're
4:02
Speaker 1: telling teens that it's OK to smoke cigarettes for two
4:05
Speaker 1: hours a.
4:06
Speaker 2: Day rather than as much as they could. And that's
4:09
Speaker 2: just not enough.
4:11
Speaker 1: It seemed like the states were in a position to
4:13
Speaker 1: finally take meta to task. for building products they knew
4:16
Speaker 1: were dangerous and getting millions of kids hooked on them
4:19
Speaker 1: for massive profits. The states had two jury victories at
4:22
Speaker 1: their backs. Meta was feeling the pressure. Why did they
4:26
Speaker 1: give in? Do the attorneys general really see this settlement
4:29
Speaker 1: as a win? Or are they spinning it as one
4:31
Speaker 1: when really they wanted a lot more? So I called
4:34
Speaker 1: up the AG who led the settlement negotiations with Meta.
4:38
Speaker 1: to ask him.
4:39
Speaker 2: Some big companies have armies of lawyers. Meta has armies
4:42
Speaker 2: of law firms. I mean, their resources are basically those
4:44
Speaker 2: of like a nation state.
4:46
Speaker 1: From Placement Theory and KCRW, this is Question Everything. We
4:49
Speaker 1: investigate how the truth gets buried, distorted, and denied, and
4:52
Speaker 1: the ways people are fighting to make it matter again.
4:55
Speaker 1: I'm Brian Reed. Today, my interview with the Attorney General
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Speaker 1: of Tennessee. Stick around. Hi, Attorney General Scarametti. How are you?
5:08
Speaker 2: Good. Good to meet you.
5:10
Speaker 1: Jonathan Scarametti is the Attorney General of Tennessee. He was
5:13
Speaker 1: one of the 40-some-odd state attorneys general suing Metta for
5:17
Speaker 1: harming teens in his state. His legal team had actually
5:20
Speaker 1: just concluded their own trial against the company in state
5:23
Speaker 1: court and were waiting for a verdict on that as
5:25
Speaker 1: the federal trial began in Oakland. And as all this
5:29
Speaker 1: was happening, Scarametti had also been chosen by his fellow
5:32
Speaker 1: attorneys general to represent them in settlement negotiations with Metta.
5:36
Speaker 1: Scramendi's a Republican. He led the negotiations alongside Colorado's attorney general,
5:40
Speaker 1: a Democrat. They both have experience dealing with tech. Scramendi's
5:44
Speaker 1: led lawsuits against Google and Roblox. He also used to
5:47
Speaker 1: teach cyber law at the University of Memphis. So he
5:50
Speaker 1: and the Colorado AG were the ones who'd get on
5:52
Speaker 1: the phone with Mehta's lawyers, then report back to the
5:55
Speaker 1: larger group of AGs trying to hammer out a deal.
5:58
Speaker 1: But nothing had come of it all year until this
6:01
Speaker 1: sudden settlement was announced mid-trial. I read that at one point,
6:05
Speaker 1: as you were discussing the settlement and whether to take it,
6:08
Speaker 1: you turned to your fellow attorneys general from different states
6:10
Speaker 1: around the country and said, there's a saying here in Tennessee,
6:13
Speaker 1: pigs get fat and hogs get slaughtered. Is that true?
6:17
Speaker 1: Did you say that?
6:18
Speaker 2: I did.
6:19
Speaker 3: Yeah.
6:20
Speaker 2: Why did you think you were going to get slaughtered? Well, politically,
6:24
Speaker 2: maybe it is better to go through to the end
6:26
Speaker 2: of trial and just sock it to them. But when
6:29
Speaker 2: we started this years ago, the goal was always to
6:32
Speaker 2: solve the problem. We want to do whatever we can
6:36
Speaker 2: collectively as the attorneys general of the states that we
6:39
Speaker 2: represent to protect our kids. I mean, if the goal
6:44
Speaker 2: was to just whack the money pinata that is meta
6:47
Speaker 2: until as many dollars as possible were extracted, that doesn't
6:51
Speaker 2: necessarily do the kids any good. It drags the cases
6:54
Speaker 2: out and it creates a lot of risk. And Getting
6:58
Speaker 2: a framework in place that actually limits the harm that
7:01
Speaker 2: the platform can do is better for us than having,
7:05
Speaker 2: you know, five to 10 years of appeals against an
7:08
Speaker 2: extremely well-resourced, extremely sophisticated opponent who could potentially invalidate everything
7:15
Speaker 2: that we've been doing.
7:16
Speaker 1: Attorney General Scarametti told me he was particularly worried that
7:19
Speaker 1: Metta could keep wielding Section 230 in appeal courts, potentially
7:23
Speaker 1: all the way up to the Supreme Court, and ultimately
7:25
Speaker 1: get the whole case thrown out. Still, I told him
7:28
Speaker 1: from where I was watching, it seemed like he and
7:30
Speaker 1: the other attorneys general had the upper hand here. You know,
7:33
Speaker 1: you'd had two juries in other states who had landed
7:36
Speaker 1: major defeats to Meta. Meta was being forced to disclose
7:40
Speaker 1: lots of damaging info publicly at trial. There was talk
7:43
Speaker 1: of Mark Zuckerberg possibly having to testify. You're in the
7:46
Speaker 1: middle of trial, mid-testimony of the head of Instagram. Why
7:49
Speaker 1: did you give in?
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Speaker 2: It felt disappointing. There's never been... settlement like this in
7:55
Speaker 2: the tech industry. You know, we banged our head against
7:58
Speaker 2: the wall with the antitrust suits against these big companies.
8:01
Speaker 2: We outright lost the Facebook monopoly case. So we've had
8:05
Speaker 2: some frustrations where everything looks like it's going our way,
8:09
Speaker 2: or at least we feel pretty good about our cases.
8:12
Speaker 2: You know, we gave up on some glory and we
8:14
Speaker 2: gave up on the catharsis of getting the jury verdict returned.
8:19
Speaker 2: But All of that was in furtherance of the long-term
8:22
Speaker 2: strategy of finding the most effective way to protect kids
8:26
Speaker 2: in our states. And so, you know, it's the nerdier outcome.
8:30
Speaker 2: It's the blander outcome. I think it's the more lasting outcome.
8:34
Speaker 2: This is injunctive relief beyond what a lot of us
8:37
Speaker 2: thought we would be able to get out of this,
8:39
Speaker 2: or at least than I thought we would get.
8:41
Speaker 1: Injunctive relief is the changes that META agreed to make
8:44
Speaker 1: to its products, basically, and its practices.
8:47
Speaker 2: Right, right. Changing the platform was always the number one priority.
8:51
Speaker 1: AG Scrimetti says the big win here is not the
8:54
Speaker 1: money Meta agreed to pay. It's the redesigns the company
8:58
Speaker 1: committed to make to Instagram and Facebook. After this settlement,
9:02
Speaker 1: kids will have a pretty different experience on these apps.
9:05
Speaker 1: Teens will only be able to use them up to
9:06
Speaker 1: two hours a day, and they'll get an alert after
9:09
Speaker 1: every 15 minutes of continuous screen use. They'll no longer
9:13
Speaker 1: get those unsolicited push notifications during school hours. and teens'
9:17
Speaker 1: feeds will be shut off between midnight and 6 a.m.
9:21
Speaker 1: Parents will also get new controls over their kids' accounts.
9:25
Speaker 1: For instance, parents will now be able to choose whether
9:27
Speaker 1: their kids are exposed to Facebook and Instagram's recommendation algorithm,
9:31
Speaker 1: which was modeled after a slot machine and shown to
9:34
Speaker 1: be addictive. They'll also get to choose whether to turn
9:37
Speaker 1: on features such as light counts and beauty filters for
9:39
Speaker 1: their kids that have been shown to lead to depression, anxiety,
9:43
Speaker 1: and body dysmorphia. To implement all this, Meta has agreed
9:47
Speaker 1: to specific improvements in the way it checks users' ages.
9:51
Speaker 1: Meta will also have to give access to an auditor
9:53
Speaker 1: that the states will appoint to make sure the company
9:55
Speaker 1: is doing everything it said it would. The closest thing
9:58
Speaker 1: to a regulator this industry has seen. Scrimendi told me
10:01
Speaker 1: he's very skeptical they would have gotten changes this strong
10:04
Speaker 1: if they'd left it to the whim of a jury
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Speaker 1: or judge.
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Speaker 2: I think we would have had some time restrictions. I
10:10
Speaker 2: think we would have had some, you know, some limitations
10:13
Speaker 2: on notifications. I don't think we would have had the
10:16
Speaker 2: option for parents to turn off the algorithmic feed altogether.
10:19
Speaker 2: I think that's the best outcome here, right, is just
10:22
Speaker 2: switching to a chronological feed. Giving parents that option takes
10:27
Speaker 2: away so many of the problems and lets kids enjoy
10:30
Speaker 2: the benefit of connecting with their friends without subjecting them
10:34
Speaker 2: to all of the algorithmic chicanery that warped their brains.
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Speaker 2: I think there would have been a lot of reluctance
10:40
Speaker 2: on the part of a court to dig into the
10:41
Speaker 2: machinery of addiction inside the platform as thoroughly and effectively
10:48
Speaker 2: as I think we're able to do with the deal.
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Speaker 2: And it's really using a hatchet where the settlement lets
10:53
Speaker 2: us take a scalpel.
10:54
Speaker 1: I mean, we have an example to look at in
10:56
Speaker 1: New Mexico, which we've reported on here that did go
10:58
Speaker 1: through a trial where eventually a judge issued a court
11:02
Speaker 1: order doing what you're saying. He did go through a
11:04
Speaker 1: lot of very detailed or relatively detailed, I think, features
11:09
Speaker 1: on the platform. And some he said, I don't I
11:12
Speaker 1: think I'm restricted in weighing in on these others. He
11:13
Speaker 1: did weigh in on sometimes as granular as hours when
11:18
Speaker 1: a platform can send notifications, you know, to kids. So
11:22
Speaker 1: did you look at that? Cause it came out kind
11:24
Speaker 1: of as you were in the midst of your trial
11:26
Speaker 1: and did it play a role in your decision to
11:28
Speaker 1: settle seeing how the judge had, you know, kind of
11:30
Speaker 1: dealt with those issues in New Mexico?
11:34
Speaker 2: We did look at it and in some ways we
11:36
Speaker 2: were able to do better. I mean, in terms of
11:37
Speaker 2: the time limits over the course of a month, um,
11:41
Speaker 2: you know, the New Mexico judge allowed more hours than
11:43
Speaker 2: our settlement agreement allows.
11:45
Speaker 1: So it's like New Mexico got three hours per day
11:47
Speaker 1: of a limit, roughly, and you all got two hours
11:50
Speaker 1: per day.
11:51
Speaker 2: Correct.
11:52
Speaker 1: It is also true that the judge in New Mexico,
11:54
Speaker 1: in his ruling against Meta, declined to force the company
11:58
Speaker 1: to change its algorithm at all, even though he acknowledged
12:01
Speaker 1: that it seriously addicted and harmed kids. The judge said
12:04
Speaker 1: Section 230 and the First Amendment tied his hands there.
12:07
Speaker 1: By negotiating with Meta in a settlement, Scermetti and the
12:10
Speaker 1: other attorneys general were able to circumvent that legal hurdle.
12:14
Speaker 1: And he told me it was hard won. They tried
12:16
Speaker 1: to get Meta to remove the recommendation algorithm altogether for kids.
12:20
Speaker 2: Which, in an ideal world, would be how this was implemented.
12:24
Speaker 2: To say, hey, for kids, we're not going to use
12:28
Speaker 2: the addictive content delivery system that we've worked so hard
12:31
Speaker 2: to develop.
12:32
Speaker 1: But Meta refused to go that far. I guess that's
12:35
Speaker 1: how valuable the algorithm is to them. In keeping users,
12:38
Speaker 1: even kids under 18, scrolling, scrolling, scrolling. And what did
12:42
Speaker 1: you got? So is it the default that the algorithm
12:44
Speaker 1: is on for kids or the default that it's off?
12:48
Speaker 2: The default is that it's on. Parents can turn it off. Okay.
12:51
Speaker 2: So we weren't able to completely eliminate the algorithm. But,
12:56
Speaker 2: you know, I think the New Mexico experience shows that
12:58
Speaker 2: is not something likely if we want to trial. I mean,
13:02
Speaker 2: that's a huge move for a court to make to
13:05
Speaker 2: say we're going to completely rewrite how your business interacts
13:09
Speaker 2: with with children at the most fundamental level.
13:12
Speaker 1: It struck me, talking to Attorney General Scarametti, how fearful
13:15
Speaker 1: he was, not only of Metta's legal prowess, but of
13:19
Speaker 1: the laws he has to operate within in general when
13:22
Speaker 1: suing a social media company like Metta. I could hear
13:25
Speaker 1: him navigating all these legal tripwires as he gamed out
13:28
Speaker 1: his different paths. Section 230 could trip me up if
13:31
Speaker 1: I try to go for this. The First Amendment could
13:33
Speaker 1: get in the way if I try to get that.
13:35
Speaker 1: Those laws are huge protections Meta and other social media
13:38
Speaker 1: companies have from liability. Meanwhile, Congress and state legislatures have
13:43
Speaker 1: not passed strong regulations for social media, which leaves the
13:46
Speaker 1: attorneys general without much to draw on. They have to
13:49
Speaker 1: come up with inventive ways to use laws that were
13:52
Speaker 1: not written for tech to go after these companies, like
13:55
Speaker 1: old consumer protection laws that have traditionally been used to
13:58
Speaker 1: go after companies selling defective toys or cars, or public
14:02
Speaker 1: nuisance laws that that previously applied to factories that are
14:05
Speaker 1: polluting the air. They've had to wield those against Meta,
14:08
Speaker 1: all the while worrying if they make one wrong move,
14:11
Speaker 1: will it bring their whole case crashing down? I want
14:14
Speaker 1: to ask you quickly about age verification, even though it's
14:17
Speaker 1: not a quick subject.
14:18
Speaker 2: Okay, cool.
14:20
Speaker 1: As we've gone into in other episodes, one of the
14:22
Speaker 1: questions that shoots through all these cases with social media
14:25
Speaker 1: is how are these companies verifying the ages of their users?
14:29
Speaker 1: If you're going to have specific restrictions for teens... you
14:32
Speaker 1: need to know that they are, in fact, teens. When
14:35
Speaker 1: people sign up for Instagram or Facebook, they just have
14:37
Speaker 1: to give their age on the honor system. And the
14:40
Speaker 1: company knows that, for instance, kids under the age of 13,
14:43
Speaker 1: which is Meta's own cutoff for being old enough to
14:45
Speaker 1: use its apps, routinely lie to get on them. The
14:48
Speaker 1: company doesn't require IDs, and the new settlement doesn't require
14:52
Speaker 1: them either. That would be called age verification. What Meta
14:56
Speaker 1: has agreed to with Tennessee and the other states is
14:58
Speaker 1: to get better at what's known in industry jargon as
15:01
Speaker 1: age assurance. which is using various other tactics like having
15:05
Speaker 1: their AI monitor users' posts or see the ages of
15:09
Speaker 1: their friends, things like that, to ferret out which accounts
15:12
Speaker 1: might be underage. What did you get that's key that
15:15
Speaker 1: you feel like this is going to be better, like
15:17
Speaker 1: we're actually going to know who are kids and who aren't?
15:20
Speaker 2: I mean, the best thing about it is it exists, right?
15:23
Speaker 2: We have a state statute that attempts to impose age verification.
15:26
Speaker 2: We are getting whooped in court. trying to implement that.
15:30
Speaker 2: So it's either nothing or something. They were willing to
15:32
Speaker 2: concede to something that I don't know that we could
15:34
Speaker 2: have otherwise obtained.
15:36
Speaker 1: And what did they agree to? Like, what's the highlight?
15:39
Speaker 2: I mean, the highlight is they're going to use the
15:40
Speaker 2: data that they have to have a very good idea
15:44
Speaker 2: of whether an individual user is a particular age. And
15:48
Speaker 2: this is a very technical discussion. I'm not super in
15:51
Speaker 2: the weeds. There were some staff members that just lived
15:55
Speaker 2: nothing but age assurance.
15:56
Speaker 1: Bless them.
15:57
Speaker 2: Getting to an agreement that they felt good about.
15:59
Speaker 1: Yeah.
15:59
Speaker 2: Bless them.
16:00
Speaker 1: I asked our producer, Zach St. Louis, who was part
16:03
Speaker 1: of our coverage of the New Mexico trial, became our
16:05
Speaker 1: show's resident reporter on age verification. Bless him. To take
16:09
Speaker 1: a look at the concessions Scermetti and co. got here.
16:12
Speaker 1: And he said what Meta agreed to does go further
16:14
Speaker 1: than they have before. In New Mexico, even though the
16:17
Speaker 1: state won the case at trial, the judge forced Meta
16:20
Speaker 1: to do less on age checks than the company agreed
16:23
Speaker 1: to in this settlement. The New Mexico judge said Meta
16:26
Speaker 1: had to, quote, improve on age assurance. Attorney General Scrimetti
16:30
Speaker 1: and his colleagues got Meta to commit to specific accuracy
16:33
Speaker 1: targets in identifying underage accounts and getting them off the app.
16:38
Speaker 1: And Meta agreed to have an auditor who will hold
16:40
Speaker 1: them to those targets. Scrimetti doesn't know if they would
16:43
Speaker 1: have been able to accomplish that if they'd stayed in court.
16:46
Speaker 2: We are going to have a lot more age assurance
16:48
Speaker 2: than we currently have. And so that's another win where
16:52
Speaker 2: you look at what the alternative would be if we
16:53
Speaker 2: hadn't been able to reach an agreement. And the alternative
16:55
Speaker 2: might have been we get nothing.
17:03
Speaker 1: Coming up, the biggest demand Meta had in order to
17:06
Speaker 1: settle that came right from the top. I'll report it.
17:19
Speaker 1: At the beginning of this year, Mehta hired a new
17:21
Speaker 1: chief legal officer named C.J. Mahoney. He used to be
17:24
Speaker 1: Microsoft's general counsel and worked in the first Trump administration.
17:28
Speaker 1: Days into his new job at Mehta, back in January,
17:31
Speaker 1: he called up Attorney General Scrimetti, saying he wanted to
17:34
Speaker 1: start discussing a deal. Over the course of the next
17:37
Speaker 1: eight months, while Mehta suffered one loss after another in
17:40
Speaker 1: the other child safety trials... Mahoney would put up a
17:43
Speaker 1: good front publicly in interviews, insisting Mehta was going to
17:46
Speaker 1: fight to the end.
17:47
Speaker 2: We disagree with these verdicts, respectfully.
17:49
Speaker 3: We think that they're vulnerable on appeal, and we're going
17:51
Speaker 3: to pursue those appeals aggressively.
17:53
Speaker 1: But behind the scenes, he was very eager to strike
17:56
Speaker 1: a deal to make the suits go away. Just days
17:59
Speaker 1: before the multi-state trial started in Oakland, Mahoney flew to
18:03
Speaker 1: Nashville to meet with Attorney General Scarametti and some of
18:05
Speaker 1: the other AG's offices. Mehta was prepared to offer a
18:08
Speaker 1: significant settlement. Mark Zuckerberg had approved it. But there was
18:12
Speaker 1: one condition that was non-negotiable.
18:15
Speaker 2: The contingency.
18:17
Speaker 1: Mahoney insisted on a structure where Meta would agree to
18:19
Speaker 1: a bunch of baseline things. A minimum payment, certain changes
18:23
Speaker 1: to its platforms. But the company would agree to do
18:25
Speaker 1: more contingent on its competitors also changing their platforms. TikTok, Snapchat,
18:32
Speaker 1: and YouTube. Meta didn't want to go down alone. So
18:35
Speaker 1: for instance, sure the settlement was for $ 17 billion dollars.
18:39
Speaker 1: But Meta only has to pay the full $ 17 billion
18:42
Speaker 1: if the other companies settle with the states on similar
18:45
Speaker 1: terms as well. Otherwise, Meta only has to pay $ 12 billion.
18:49
Speaker 1: Same with some of the app modifications. As of now,
18:52
Speaker 1: Meta is limiting Teams to two hours per day on
18:55
Speaker 1: its apps. But if all the other companies sign on,
18:57
Speaker 1: it's agreed to drop the limit down to one hour.
19:00
Speaker 1: Throughout all its negotiations with Scrimeti and the other AGs,
19:03
Speaker 1: Meta was dead set on this. Which I found interesting
19:06
Speaker 1: to hear, because I'd seen the company focus on the
19:09
Speaker 1: same thing in the other trials this year, like in
19:12
Speaker 1: New Mexico. In court, Meta's lawyers kept saying, hey, the
19:15
Speaker 1: other social media apps are doing the same things. Why
19:18
Speaker 1: are you picking on us? They seemed fixated on this.
19:21
Speaker 1: What does that tell you about Meta, about the industry?
19:26
Speaker 2: So I think there are two things driving that. The
19:28
Speaker 2: first is pure capitalism. Other industry participants are doing the
19:33
Speaker 2: same bad thing. And by moving first, Meta is going
19:36
Speaker 2: to lose ground to them competitively. Now they're trying to
19:39
Speaker 2: pivot and say, hey, we're the responsible ones who took
19:42
Speaker 2: the deal first. And that's the smart thing for them
19:45
Speaker 2: to do. We expected they would do that. We get
19:46
Speaker 2: that they do that.
19:47
Speaker 1: Yeah, they're running an ad campaign now to try and
19:50
Speaker 1: like shame TikTok and YouTube and Snapchat into settling with
19:54
Speaker 1: you guys as well. There's a big newspaper print campaign
19:57
Speaker 1: Meta's doing, calling on those other companies to strike their
20:00
Speaker 1: own deal with the states. Also, Chief Legal Officer C.J.
20:03
Speaker 1: Mahoney released this video after the deal was finalized.
20:07
Speaker 2: Our new time limit commitments.
20:09
Speaker 3: Night mode features, and usage limits during school hours set
20:12
Speaker 3: the right path forward for our whole industry. But this
20:15
Speaker 3: framework will only work if all our peers join us.
20:18
Speaker 3: We therefore call on our industry peers, TikTok and YouTube,
20:22
Speaker 3: to implement this new framework right away. As a parent,
20:26
Speaker 3: I'm proud both of the work Meta has done to
20:28
Speaker 3: protect kids historically and of this new groundbreaking agreement.
20:32
Speaker 1: Scrimetti says this moral high ground tour doesn't bother him.
20:36
Speaker 2: I'm not opposed to this. I would love the entire
20:38
Speaker 2: industry to do what they are supposed to do. And
20:42
Speaker 2: we sued Meta. They were the first ones we went after.
20:45
Speaker 2: So I think that shows it was a priority for
20:48
Speaker 2: us to get them in line. But they got in line.
20:52
Speaker 2: So I don't mind them bragging about it a little
20:54
Speaker 2: bit now that they're on board. I think there's another
20:57
Speaker 2: dynamic here too, though. And that is Mark Zuckerberg has
21:00
Speaker 2: been singled out as kind of the face of evil
21:03
Speaker 2: big tech. when there are a lot of other companies
21:05
Speaker 2: that are engaged in the same conduct and making similar
21:08
Speaker 2: amounts of money that are under the radar. And I
21:12
Speaker 2: don't know this for sure. This is pure speculation. But
21:15
Speaker 2: my guess is Mark Zuckerberg does not love being vilified
21:20
Speaker 2: when he feels like he is just one of the
21:22
Speaker 2: participants here. And so by taking the deal, maybe he
21:27
Speaker 2: viewed that as an opportunity to show that he is
21:31
Speaker 2: not the tech bad guy, that it is an industry thing,
21:35
Speaker 2: that they wanted to make sure the focus was spread
21:37
Speaker 2: across companies.
21:37
Speaker 1: Oh, you think this maybe came from Mark Zuckerberg himself
21:41
Speaker 1: and had kind of almost a personal motivation?
21:44
Speaker 2: I mean, it's pure speculation, but I got to think
21:46
Speaker 2: it's really hard to be the punching bag for an industry.
21:51
Speaker 2: Being hated to the point of, you know, solidifying a
21:56
Speaker 2: place in history as the villain, no matter how much
21:59
Speaker 2: money there is, like, I think it probably gets old
22:02
Speaker 2: being vilified like that. He probably worries about his kids seeing,
22:05
Speaker 2: you know, memes about him or reading about all the
22:08
Speaker 2: horrible things that he's responsible for. And maybe he was
22:12
Speaker 2: looking to find a basis for saying, hey, I'm not
22:14
Speaker 2: the bad guy, making it very clear that other industry
22:18
Speaker 2: players were doing the same bad stuff. And he is
22:20
Speaker 2: not some uniquely evil person.
22:23
Speaker 1: Hence the contingency, a shrewd Zuckerbergian move. I think it's
22:28
Speaker 1: rubbing some people the wrong way as I read about
22:30
Speaker 1: reactions to the case, because it looks as if Meta
22:34
Speaker 1: is using you all to dictate terms to its competitors,
22:38
Speaker 1: basically to get a dig in on its competitors. And
22:42
Speaker 1: like this is supposed to be a case about holding
22:44
Speaker 1: Meta accountable for the wrongs it did to kids. Why
22:48
Speaker 1: do they get to, you know, get this dig in
22:51
Speaker 1: on their competitors through it?
22:54
Speaker 2: The goal all along was to make this industry wide.
22:57
Speaker 2: We sued Meta because we viewed that as the industry leader.
23:00
Speaker 2: We also have litigation going on with TikTok right now.
23:03
Speaker 2: Other people are deep in litigation with Snapchat. Less so,
23:08
Speaker 2: but some are litigating against YouTube. So this was never
23:13
Speaker 2: just about Meta. Meta obviously did bad things. There had
23:17
Speaker 2: to be accountability. There had to be changes. But if
23:21
Speaker 2: this just becomes about Meta, then we're not actually protecting
23:25
Speaker 2: the kids in our states. because the entire industry has
23:29
Speaker 2: been engaged in the same conduct. One of the things
23:32
Speaker 2: that I've always been struck by is the fact that
23:35
Speaker 2: a lot of the people involved in these companies are parents,
23:39
Speaker 2: and they have kids, and they worry about their kids'
23:41
Speaker 2: exposure to technology. And I'm sure they feel a deep
23:44
Speaker 2: sense of hypocrisy about the worries they have about their
23:48
Speaker 2: kids versus what they know they're doing to other kids
23:50
Speaker 2: out there. And I don't think most of them are
23:56
Speaker 2: sociopathic monsters. I think there's a lot of money involved
24:00
Speaker 2: and they probably let themselves be convinced by the money
24:04
Speaker 2: that they weren't doing anything that was that bad.
24:11
Speaker 1: How do you feel about the money side of it,
24:13
Speaker 1: where you landed? That was another reaction I had. It
24:17
Speaker 1: is true that this is the biggest settlement for the
24:20
Speaker 1: big tech industry and But I think it says something
24:23
Speaker 1: about the size and power of that industry that relative
24:27
Speaker 1: to Meta's revenue, it's still a pretty small number. You know,
24:30
Speaker 1: $ 17 billion. This is a company that had $ 200 billion
24:35
Speaker 1: in revenue in one year alone in 2025. And this
24:38
Speaker 1: is going to be paid out over a decade. There's
24:40
Speaker 1: contingencies on whether all of it will be paid out.
24:43
Speaker 1: I do just want to understand, why are these the
24:45
Speaker 1: numbers you landed on? And do you believe that financial
24:48
Speaker 1: penalty is sufficient?
24:50
Speaker 2: The money here, from a Tennessee perspective, is phenomenal. We
24:56
Speaker 2: got $ 752 million if the contingency kicks in. It's a
25:00
Speaker 2: floor of, I think, $ 530 million, which is still one
25:04
Speaker 2: of the biggest financial outcomes in a case in Tennessee history.
25:07
Speaker 2: I think it is the record. This is the biggest
25:10
Speaker 2: penalty against a tech company in global history. So it's
25:13
Speaker 2: not nothing.
25:14
Speaker 1: I mean, the initial demand was something like $ 200 billion.
25:16
Speaker 1: And I know there were reports of, you know, Meta's
25:19
Speaker 1: entire market share over a trillion.
25:21
Speaker 2: You know, what you ask for in negotiations of what
25:23
Speaker 2: you expect to get can be different. Often you will
25:27
Speaker 2: have the maximalist approach and the other side will offer
25:31
Speaker 2: some ridiculously small number. That's the way all of these
25:34
Speaker 2: negotiations go.
25:36
Speaker 1: What do you think of the Florida attorney general's response,
25:38
Speaker 1: which I'm sure you're familiar with? I have a quote
25:40
Speaker 1: from him here because Florida held out. They did not
25:42
Speaker 1: take part in the settlement. They're taking Meta to trial.
25:45
Speaker 1: The Attorney General James Altemeier said the payouts are, quote,
25:48
Speaker 1: peanuts compared to the profound harms met as profit-driven addictive
25:52
Speaker 1: features inflicted on kids and a slap on the wrist
25:55
Speaker 1: for a trillion-dollar corporation that'll pay more to lawyers than
25:59
Speaker 1: to the states. We'll see them at trial.
26:02
Speaker 2: I mean, I think once he's collected a larger amount
26:05
Speaker 2: of money, then, you know, he'll be vindicated. But if
26:09
Speaker 2: he doesn't or if he's not getting there until a
26:12
Speaker 2: decade from now, You know, better to have peanuts than nothing.
26:16
Speaker 2: I don't think this is peanuts. This is a record-setting
26:21
Speaker 2: amount of money. The EU, which has been going after
26:25
Speaker 2: Meta and other companies for ages, has never come close
26:28
Speaker 2: to getting this much. Part of me really wanted to
26:31
Speaker 2: get that verdict. But I think by an objective measure,
26:36
Speaker 2: this is the most anybody has ever gotten out of
26:38
Speaker 2: a tech company. You can compare it against a blank
26:41
Speaker 2: slate of your imagination. But look at what people have
26:45
Speaker 2: actually been able to do to regulate the excesses and
26:49
Speaker 2: misconduct of the tech industry. I would say this settlement
26:53
Speaker 2: is probably the landmark.
27:05
Speaker 1: I came away from talking to Attorney General Scarametti, certainly
27:08
Speaker 1: understanding better his decision to settle. He's a pragmatic guy.
27:12
Speaker 1: And he and the other AGs probably did get Meta
27:14
Speaker 1: to do more to protect kids more quickly than they
27:17
Speaker 1: would have by fighting the company in courts around the
27:19
Speaker 1: country for years on end. That said, I still wish
27:23
Speaker 1: they had seen their trials through. In a pure way,
27:27
Speaker 1: I wanted Meta to face its day in court. One
27:30
Speaker 1: of the most frustrating things about this settlement is that
27:33
Speaker 1: Meta does not have to admit any wrongdoing. I worry
27:37
Speaker 1: that's going to allow them to try and gaslight the
27:39
Speaker 1: public into thinking the company didn't do anything bad. even
27:42
Speaker 1: as they keep hawking new, potentially dangerous or creepy products
27:46
Speaker 1: like their Metaglasses or the new AI companion agent thingy
27:50
Speaker 1: they just rolled out this month called Muse. Not admitting
27:54
Speaker 1: any wrongdoing. That does not give me confidence that the
27:58
Speaker 1: company's learned its lesson. Today's show was produced by Sam
28:07
Speaker 1: Egan and edited by Jen Kinney. Please follow Question Everything
28:10
Speaker 1: wherever you get your podcasts, rate and review our show,
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Speaker 1: sign up for our sub stack, questioneverything.substack.com, and find our
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Speaker 1: reporting about Meta on Instagram at questioneverything.podcast. Robin Semyon and
28:22
Speaker 1: I are the executive producers of the show. Kevin Sullivan
28:25
Speaker 1: is our executive editor. Our team also includes producers Tracy
28:27
Speaker 1: Hunt and Zach St. Louis, associate producer Kevin Shepard, and
28:31
Speaker 1: contributing editor Neil Drumming. This episode was fact-checked by Annika
28:34
Speaker 1: Robbins and Marisa Robertson-Textor. Mixing and sound design by Brendan Baker.
28:38
Speaker 1: Our music is by Matt McGinley. Evie Kwong runs our
28:40
Speaker 1: social media. Thanks to our partners at KCRW, who include
28:43
Speaker 1: Arnie Seipel, Tejla Jamera, Natalie Hill, and Jennifer Farrow. We'll
28:47
Speaker 1: be back next week.