Meta Agrees to $17.1 Billion Settlement in Child Safety Battle

Six days before a federal trial on online child safety, Chris Mahoney, Meta’s chief legal officer, flew to Denver on August 6 to meet with attorneys general from a group of states. His goal was to negotiate a massive settlement, according to sources familiar with the talks.

Meta had recently faced legal setbacks this year over claims that its platforms factored addictive elements harming young users. CEO Mark Zuckerberg had undergone intense questioning during a previous trial, repeatedly stating he was mischaracterizing the situation. He was likely to be scrutinized again in an upcoming California trial, where state coalitions argued that Meta contributed to a national child mental health crisis.

Over bagels and coffee in an Art Deco state capitol office, Mahoney presented terms personally approved by Zuckerberg to the attending attorneys general. Meta offered up to $19 billion to the states and committed to platform changes for improved teen safety, with some funds contingent on universal state participation and similar settlements by other companies.

The attorneys general were receptive, having struggled with limited progress in months of talks. On Tuesday, 47 states, along with the District of Columbia and territories, settled for roughly $17 billion.

During meetings, Tennessee Attorney General Jonathan Skrmetti urged moderation, quoting, “Pigs get fat, and hogs get slaughtered.”

This settlement, one of the largest between a company and states in litigation, was announced Wednesday. The following account draws from interviews with state officials, former and current Meta staff, court records, and testimonies.

For years, Meta relied on Section 230 of the Communications Decency Act and First Amendment protections as a strong defense in child safety lawsuits.

However, global concerns about children’s online health grew, prompting bans like Australia’s on social media for under-16s, with other nations considering similar policies.

Since 2022, numerous U.S. online child safety lawsuits have argued that social media companies intentionally designed products to harm young users, violating consumer protection laws—a tactic inspired by litigation against tobacco companies.

This shifted focus from reliance on Section 230, increasing legal pressure on companies.

Meta’s worries about the cases intensified, as observed internally.

In January, Meta hired Mahoney, a experienced litigator from Microsoft, as chief legal officer. His focus included negotiating a settlement, drawing from his role in the Trump administration’s trade deal with Canada and Mexico.

Shortly after starting, Mahoney contacted lead state negotiators Phil Weiser of Colorado and Skrmetti of Tennessee, proposing a broad settlement for all federal and state cases.

An early obstacle was Meta’s unwillingness to make safety changes, which states deemed non-negotiable.

Skrmetti emphasized that platform reform is “the most significant part” of the suits, aimed at protecting children.

Weiser noted every attorney general had personal experiences of children harmed by social media, driving a shared commitment to act.

Negotiations paused, but Meta received a stark warning: a trial presided by K.G.M., alleging infinite scroll features caused her anxiety and depression.

Defendants like Meta, Snap, TikTok, and YouTube had hoped the case be dismissed under Section 230, but Judge Carolyn B. Kuhl ruled it concerned product liability, not just speech.

The five-week trial embarrassed Meta deeply, with Zuckerberg’s examination on child safety, prompted by packed court from affected parents, and evidence showing internal analogies to drug pushing.

Concurrently, New Mexico pursued specific consumer protection charges, leading to Meta’s losses in both trials within two days in March.

Additional trials raised risks to Meta’s reputation; with several states like California, Colorado, Kentucky, and New Jersey preparing for the summer trial in Oakland, facing up to $200 billion in penalties and mandatory changes.

Other attorneys general had 서로 filings, yet progress lagged in talks, with Meta resisting full safety features.

Just before the Oakland trial, on July 22, Meta appealed to seek dismissal of cases based on Section 230. While awaiting the decision, Mahoney took a settlement offer to Tennessee, leaving without agreement, but talks continued.

On August 10, the appeals court rejected Meta’s argument, accelerating negotiations. Daily sessions led to key concessions, including stopping endless scrolling for teen users, a two-hour daily limit on Instagram and Facebook, restrictions between midnight and 6 a.m., and silenced notifications during school hours (8 a.m. to 3 p.m.).

Meta proposed increased payments and limits if rival platforms like TikTok and YouTube agreed to similar controls, opposing being singled out.

Avoiding trial was a priority, so Meta conditioned settlement on universal state acceptance. However, during an August 11 call, some attorneys general questioned whether the amount was adequate and how funds would be allocated.

States devised a formula for distributing funds based on populations and charges against Meta.

While some states negotiated in person and via video, Zendaya’s trial continued in Oakland, but it was temporarily paused. On Sunday, Colorado and Tennessee pensioners to strategize a final offer, requiring signatures by Tuesday at 6 p.m.

That day, Instagram head Adam Mosseri testified, with plans to receive Zuckerberg’s testimony pending.

On Tuesday, all states signed except Texas, Florida, and New Mexico; the latter having already won its case. New Mexico settled separately for about $1 billion with similar safeguards.

California AG Rob Bonta stated on Wednesday that Section 230 and the First Amendment offer no “impenetrable shield,” highlighting limitations in achieving justice for victims of misconduct.

Mahoney expressed pride in the agreement, his role in empowering parents, but emphasized success hinges on other platforms following Meta’s example.

Numerous related cases remain, with the next major trial set for October in Los Angeles County Superior Court.

Meta professed confidence in winning future lawsuits.

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