Berliner Tageblatt - Meta settlement puts social media industry on notice: 'There will be more'

Parts of the settlement hinge on whether those three companies, referred to as "Core Industry Members" in a legal filing, take similar action.

It's "the right path forward for our whole industry, but this framework will only work if all our peers join us," Meta Chief Legal Officer C.J. Mahoney said in a statement.

California led a coalition of states that accused Meta of designing Instagram and Facebook to hook minors, harvest their data and deceive the public.

California and New York are leading a separate lawsuit against TikTok.

"We've definitely had communications with TikTok around our lawsuit and what we're seeking," California Attorney General Rob Bonta said Wednesday on a call with reporters, adding that states also have been in talks with other companies in the industry.

Hawaii Attorney General Anne Lopez called for industry-wide changes as well.

"I hope that Snapchat, TikTok and YouTube will read the writing on the wall and enter into similar settlements," Lopez said in a statement.

It's unclear exactly how the settlement will be implemented, or how far-reaching it will be, but Bonta said he expected it to be implemented "over the coming months."

If Meta violates the terms, "we will be able to hold them in contempt of court," Bonta said.

- 'Sets a precedent' -

Many experts agree that financial penalties are the least of Meta's concerns.

A $17 billion fine is a small amount for a company that has a market value around $1.5 trillion and annual revenue of about $200 billion.

Investors also seemed unbothered; Meta's shares rose 1 percent Wednesday.

The bigger risk for Meta and other social media companies is whether the deal opens the door for more legal settlements and product changes.

"There will be more settlements in other cases as well because this certainly sets a precedent," said Vanitha Swaminathan, a marketing professor at the University of Pittsburgh.

Social media companies have evaded certain types of lawsuits in the United States due to free speech protections that shield them from liability.

However, state prosecutors in this case focused on Meta's business practices.

"This might be how we regulate social media in the future," Vincent Joralemon, a legal expert at Berkeley, told AFP.

"Sue them, then have them make the platform changes on their own," he said. "This is a clever workaround for First Amendment protections that otherwise stymie social media regulations."

Bonta said it was telling that Meta decided to settle midway through testimony from Adam Mosseri, who oversees Instagram at Meta -- and before CEO Mark Zuckerberg was scheduled to take the stand.

Mosseri admitted in court Tuesday that he touted safety tools for teens without disclosing low adoption rates from early testing several years ago.

"The trial did not go well for Meta," Bonta said.

Thousands of lawsuits brought against social media companies over alleged harm to young people have been winding their way through various legal systems across the United States.

Earlier this year, Meta and YouTube were found liable for causing harm in a Los Angeles case and ordered to pay $6 million to a young woman. They intend to appeal.

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G.Schulte--BTB