• by Joe Mandese , 3 hours ago

In terms of other recent consumer harm settlements with state attorneys general, Big Tech's $17.1 billion social-media child exploitation agreement pales in comparison with Big Tobacco, Big Banking and Big Pharma, but it is about 10 times greater than Big Tech's own recent consumer privacy violations settlements.

Meta is the first to settle -- agreeing to pay states $12.19 billion over 10 years -- but that amount increases to $17.1 billion contingent on TikTok, YouTube and Snapchat, each facing state enforcement actions and investigations, agreeing to comparable safety terms and monetary relief.

"More importantly, Meta agreed to structural remedies that limit usage to two hours per day with nighttime blocks from 12am-6am, which are likely to impact user engagement and ad load," BMO Capital Markets analyst Brian Pitz writes in an investors' note analyzing the terms of the agreement.

While Meta's monetary settlement is a "meaningful penalty," Pitz recommended investors focus on the structural remedies of the agreement, including:

• Daily usage limits (up to two hours per day, or one hour if competitors follow suit) that can be turned off with parental consent.

• "Night Mode" that blocks teen access from 12am-6am (or 10pm-7am if competitors follow suit).

• Enhanced age assurance measures to prevent minors from creating accounts.

• Parental controls and tools to monitor/restrict usage.

• "School Mode" that mutes notifications between 8am-3pm.

The settlement is subject to the approval of United States District Court Judge Yvonne Gonzalez Rogers of the Northern District of California.

“Meta intentionally exploited kids for profit and then lied about it, claiming its products were safe when its own internal research confirmed the platforms were addictive and harmful,” stated D.C. Attorney General Schwalb. “This is a monumental public health victory for young people in DC and across the country, and the safety features Meta is required to install will fundamentally and immediately change how young people use Instagram and Facebook. The physical, mental, and emotional harms that intentionally addictive social media platforms inflict on youth — and particularly teenage girls — are widespread across the tech industry, and this successful, coordinated multistate litigation has resulted in Meta being the first platform to come to the table and agree to such comprehensive reforms. It will not be the last.”

“Meta strip-mined the souls of America's children for maximum profit with abusive and addictive features that unleashed a youth mental health catastrophe. That ends now," stated Connecticut AG William Tong, adding: "This is the largest settlement in American history with a single defendant, reflecting the magnitude of Meta’s misconduct and the unprecedented wealth they amassed from it. But this has never been about money. This settlement charts a new course for online safety, enforcing sweeping reforms to fundamentally alter the experience for kids on Instagram and Facebook. Over the next year, and in some instances much sooner, Meta must deploy robust age verification measures, critical caps on time online, parental options to turn off algorithmic feeds and auto-play functions, and content moderation, among other critical reforms.

"We will aggressively monitor this rollout and will not hesitate to return to court to protect the safety of our kids online. To TikTok, YouTube and Snapchat—our expectations are clear. You’re next."