Meta Settles U.S. Teen SNS Lawsuit for Up to USD 18 Billion Over 10 Years

Meta has resolved a U.S. state government lawsuit over the harmful effects of Facebook and Instagram on teenagers and the companies' safeguards through a settlement that includes monetary payments and operational changes. According to Reuters, on the 26th, Meta reached a settlement with 52 attorneys general representing U.S. states, DC, and U.S. territories in a lawsuit over harm to teenagers from social media, and the settlement was approved by the court on the 27th.

Under the settlement, Meta will pay up to USD 18 billion to resolve state government lawsuits related to the harmful effects of SNS on U.S. teenagers over 10 years. The services involved are Facebook and Instagram.

Meta's measures include limits on teens' social media use time, nighttime access restrictions, and stronger age verification. However, there are no separate restrictions on its existing revenue model, and there are no limits on personalized ads.

The lawsuit stemmed from issues involving the design of Facebook and Instagram and safeguards for teenagers. State governments have argued that Meta applied features that encouraged teens to spend long hours on the platforms and that its disclosures about the risks of using the platforms were insufficient.

During the settlement process with Meta, questions also arose over the handling of children's personal data. State governments alleged that Meta collected and used the personal information of users under 13 without proper parental consent.

State governments also argued that these actions amounted to a violation of Meta's Children's Online Privacy Protection Act, or COPPA, in the U.S. Meta did not admit the related allegations during the settlement process, however.

As a result of the settlement, Meta's burden over the next 10 years will reach up to USD 18 billion. Of this, the fixed payment amount is about USD 12.7 billion and the additional possible amount is about USD 5.3 billion. Whether the additional payment will be made will depend on whether YouTube and TikTok adopt similar youth protection measures and whether they pay settlements. Meta will reflect the settlement cost in this year's earnings and is expected to book about USD 10 billion in legal costs related to the settlement in the third quarter of this year.

Along with the monetary settlement, Meta will also change how teen accounts are operated on Facebook and Instagram. For users under 18, a combined daily limit of 2 hours of use on Facebook and Instagram will be applied by default, and this limit can be lifted only with parental permission.

The measures consist of restrictions and strengthened notifications aimed at reducing use late at night, during class, and for extended periods. Under separate nighttime-use restrictions, feeds, Reels, and Stories will be blocked by default from midnight to 6 a.m., and most push notifications will be paused from 8 a.m. to 3 p.m. However, direct messages and account security and safety-related content are exempt.

Notifications to discourage prolonged use will also be added. An alert will be shown every 15 consecutive minutes of use, separate guidance will be provided when daily cumulative usage reaches 60 minutes, and another separate guidance will be provided when daily cumulative usage reaches 90 minutes. In addition, age-verification procedures will be strengthened, and parental tools for managing children's accounts will also be enhanced.

Meta agreed to make these protections non-temporary and to keep major measures in place for 10 years. It will also undergo reviews by an independent auditing body and verify implementation annually for the next 5 years. In addition, it will establish an independent research foundation for studying the effects of teen social media use.

However, there are no direct restrictions on personalized advertising, one of Meta's core revenue sources. Content and ad recommendations based on user interests can also remain in place. The settlement is unlikely to lead to a structural change in the advertising business, and its impact is expected to be concentrated in user protection.

The settlement with Meta is likely to affect not only the company's effort to resolve disputes but also youth protection policies at other social media companies. The conditional payment structure of about USD 5.3 billion is tied to responses from YouTube and TikTok, and future lawsuits and negotiations involving YouTube and TikTok are drawing attention. Whether the use restrictions and age-verification standards in this settlement will expand to other platforms and other countries is also a key issue going forward.

The debate over youth protection regulations is spreading beyond the U.S., and related discussions are continuing in South Korea as well. The Broadcasting and Media Communications Commission says the youth protection measures Meta introduced in the U.S. need to be applied to other countries, including South Korea. In the National Assembly, a bill restricting teens' social media use has been introduced.

However, this settlement does not resolve all legal disputes involving Meta. While Meta has largely wrapped up its large-scale legal disputes with U.S. state governments through this settlement, lawsuits from some jurisdictions that did not join the agreement remain.

Lawsuits over harm from teen social media use filed by individuals and educational institutions also remain. As a result, legal disputes surrounding Meta have not completely ended even after this settlement.

Source: TECHWORLD · Kim Seung-gi
Original: https://www.epnc.co.kr/news/articleView.html?idxno=406239

References

• https://www.epnc.co.kr/news/articleView.html?idxno=406239