After years of being the national punching bag for social media harms, Meta has reached a settlement with 47 US states and several districts and territories that gives it a rare opportunity: A chance to flex on its rivals. “We want to ensure teens benefit from this new industry standard, but we cannot do it alone,” Meta says in an “Open Letter” that is also running as a full-page ad in The New York Times, Los Angeles Times, and Washington Post. “These protections will only be truly effective if we work with our peers — TikTok and YouTube — to put the same measures in place.” Snap (which is also named in the agreement), TikTok, and YouTube haven’t yet made a public statement on the settlement and did not respond to requests for comment.
Meta has reached a settlement that gives it a rare opportunity: A chance to flex on its rivals
By definition, settlements can only constrain the parties that sign them — in this case, Meta and the states. But this deal also names other industry players that both the AGs and Meta would seemingly like to get on board. While Meta will have to pay at least $12 billion to the signing states no matter what (so long as a court approves the deal), the rest of the money is contingent upon changes from three “Core Industry Members”: Snap, TikTok, and YouTube. The multibillion-dollar contingency payment will only be triggered if all three institute some of the same limits Meta’s agreed to for its apps, like daily usage limits and disabling nighttime notifications by default, and the companies that make more than $10 billion in annual profits (TikTok and YouTube) enter settlements with the states for at least as much as Meta’s $5.3 billion contingency payment, “with half of the remaining funds tied to YouTube’s payment and half tied to TikTok’s,” according to Meta.
If TikTok and YouTube don’t make the changes and pay up, Meta gets to knock $5 billion off its settlement. (That’s not a lot of money for the company — it reported around $15.8 billion in net revenue last quarter — but it’s not nothing.) If they do, it offsets the disadvantages Meta’s just agreed to and levels the playing field, ensuring teens won’t simply spend their two hours a day on Facebook and Instagram, then flee to YouTube and TikTok.
Meta gets to position itself as the platform that could soon have some of the tightest restrictions for kids in the industry, while trying to cut its rivals down to its new size
That’s not the only benefit Meta worked in. Another provision notes that its age verification framework will incorporate “reliable age signals shared with Meta by operating systems and app stores operated by Apple and Google.” While this doesn’t diminish Meta’s own obligations, it lays helpful groundwork for Meta as it tries to solidify Apple and Google as key age verification gatekeepers, by ensuring the settlement would be compatible with laws it’s been pushing for across the country.
Through this agreement, Meta gets to position itself as the platform that could soon have some of the tightest restrictions for kids in the industry, while trying to cut its rivals down to its new size.
And here’s the thing — it might actually work. Meta’s settlement will likely serve as a reference point for all future negotiations around kids online safety. It lays out what one of the biggest industry players not only thinks it can feasibly do, but also what it can live with. It also includes concrete steps for the company to take, rather than a more nebulous standard like the Kids Online Safety Act’s duty of care. It’s conceivable that other platforms will make a similar calculation that these tradeoffs are worth the trouble. If they do, it won’t just be state AGs taking a victory lap, but Meta, too.