Not many people would count paying $18bn they didn’t expect to when they woke up that morning as a victory. Yet for Meta, the owners of Facebook and Instagram, the agreement with 52 US attorneys general to settle claims that it designed its products to be addictive to children, and misled people about their safety, could be described as a win of sorts. Meta denies wrongdoing, and the amount it plans to pay will be spread over a decade.
Some of it is contingent on other big tech firms not named in its case coughing up too. The cash is chump change for Meta, which made around $60bn in profit last year. More damaging to the tech giant in the long run could be the agreement to unwind some of the mechanics it has spent two decades perfecting to keep us on its platforms.
Under-18s in the US will face a default two-hour daily limit on Facebook and Instagram, with access blocked overnight – unless a parent changes the setting. Teachers will be glad to hear notifications will be muted during school hours, while teenagers will be nagged as much by the platform itself as their parents about exactly how long they have spent staring at their screens. All of these are significant changes that materially change how the company’s products work – and all of them should be welcomed.
But in lots of ways, Meta has got off lightly with this agreement, both in what it’s been asked to do and the fine it must pay. What the decision shows, just months after Meta chose to fight its corner in court, and lost significantly, is how the economics of fighting social media litigation have changed. This settlement signifies an important and deliberate shift in strategy.
In August, Meta went to court in New Mexico – a decision that cost it dearly. The judge there ordered the firm to pay $942m and overhaul some protections for children – a decision it is appealing. The fact that Meta lost that case, and was found to have done wrong, was far more damaging than this week’s settlement without liability, even if the amounts involved are smaller.
Still, thousands more cases involving social media addiction claims are still wending their way through US courts. And chastened by a couple of losses, it looks – at least in this instance – like Meta has taken the approach that a pyrrhic victory is better than the risk of another real loss. Settlements without admission of fault don’t set precedents, while court judgments absolutely do, in a way that could quickly spiral out of control for Meta’s product offering.
Extract — continue reading at the source.
