A Historic Settlement Over Social Media Addiction

From the New York Times, I'm Michael. Bolaro. This is the daily. >> Today we are here to announce an. incredible landmark settlement with. Meta. >> On Wednesday, Meta, the world's biggest. social media company, reached a. multibillion dollar legal settlement. It. has directly contributed to our growing. youth mental health crisis.

>> over claims that its technology. including Instagram and Facebook are. addictive. >> Meta knew about these risks. >> and a danger to children. >> But the size of the settlement is not. what matters most to me or this team. What matters is that this agreement. changes what young people will. experience when they open their apps. And perhaps most importantly, the. company agreed to impose sweeping new. limits on how kids use its products. Today, business reporter Cecilia Kong on.

why a company and an industry that never. backs down finally cut a deal and. whether or not this truly marks a new. era of accountability for big tech. It's Thursday, August 27th. >> Cecilia, thank you for making time for. us on an extremely busy deadline day for.

you. >> I'm really happy to be here, Michael. Thank you. >> My pleasure. At a very high level, I. wonder if you can describe this just. hours old legal settlement and why it's. being treated as so historic and so. important. >> This is a really big deal. This is a. landmark settlement between Meta and. nearly every state. And it's about a. pretty novel legal theory, which is that.

social media platforms like Instagram. and YouTube are addictive, like. cigarettes or opioids. And that was a. really new argument presented in court. starting this year. And it hinges on. this idea that the company has harmed. users by presenting one picture of its. platforms as quite safe and healthy for. young users. Whereas internally, the. company knew differently, that it was.

actually really grappling with platforms. and technologies that could be harmful. for users. >> That they knew that this was dangerous. Which frankly reminds me a lot of the. case that was made against the tobacco. companies. They were telling the public. one thing when they knew something else. >> That's right. At the heart of this is. consumer deception. If the company. deceived its users about the true nature. of its product. >> and tell us in very broad strokes what's. in the settlement. So, the settlement.

has a big monetary penalty piece of $17. billion that Meadow will pay to nearly. every state and the District of Columbia. and US territories. It will be. distributed amongst those states for. different programs to sort of try to. correct this problem of social media. addiction. And then, which I find really. interesting and could be the most. lasting changes are changes to the. products themselves. Meta has agreed to.

implement several tools and different. changes to their platforms to make them. safer for young users, >> such as. >> there are several different things that. they've agreed to. They've agreed to. limit the number of hours that any. teenager can be on any of its apps in a. day. So, two-hour limits per day for. teenage users. >> So, quite spelled out, two hours a day. >> Exactly. And they've also limited the. use of these apps during sleeptime.

hours. Just complete blockage between. midnight and 6:00 a.m. and a limit of. notifications. So users, young teenage. users, won't get notifications between. 10:00 p.m. and 7:00 a.m. >> They've also agreed to do away with some. tools that have been known to be pretty. pernitious when it comes to the effect. they have on young people. They're known. as social comparison tools, like the. like button. >> And so, one thing they've agreed to do. is to do away with the count of likes.

that any post will have. And. >> you know, anybody who's on these sites. know what it's like. You see the like. button tally the number of hearts that. you get. So, that will be barred as a. default for teenagers. Another feature. that will be banned is known as beauty. filters. And these are really. interesting. They're otherwise known as. plastic surgery tools. They take your. your photo and they essentially edit it. in the way that you want to change your. appearance. And that also has been known.

to be really negative and harmful for. body image, for the mental health of. teenagers. So, they're going to ban that. as well. >> I mean, these are being described as. sweeping changes. And it does strike me. that the restrictions Meta is now. imposing, they're not just on overall. use, hours or time of day, but of very. specific features like you just. described that have been understood to. undermine the self-image and the mental. health of young brains. And overall, I'm.

really struck that in this settlement, Meta is doing something that companies. do not frequently do, which is drawing a. big red circle around its marquee. products and saying, "We're going to cut. people off and we're going to limit the. amount of time and the features you can. use." That's very rare in our system. Yeah, I find it stunning, Michael, because it really strikes at the heart.

of Meta's business, which is a business. of keeping you on as long as they can. This is a business that's about. engagement so that they can target ads. to you. So by limiting the amount of. time teens are on, by limiting what they. can do and the kinds of features that. are known to be really sticky that lead. to compulsive use, these are things that. can really strike at the business model. that Meta has built over these years. into this powerhouse. >> Right? >> And the settlement is studying for.

another reason in that Meta is is a. fighting company. It came into these. cases and these trials extremely. confident. They felt like they had a. very strong defense and I've been. covering this company for nearly two. decades and I would describe them as. like a pretty pugnacious company and. defiant and to see them settle fairly. early on in a set of trials that they. have against them was really revealing.

Well, tell us the story, Cecilia, of how. Meta gets to a point where it drops its. default, belligerance, and resistance to. settlement. I mean, what it comes to. understand about these lawsuits that. made it realize or conclude that it was. not going to win. It had to settle. The story begins with another case and a. trial that began back in February. brought by one woman who was then 20.

years old who went by the initials KGM. She's from Chico, California. and she. alone testified on stand in front of a. jury and described just how painful it. was for her to endure a lot of the. mental health challenges that she faced. that she linked directly to her use of. social media apps. >> Right. You talked about this case and. about this young woman actually on an. episode of the Daily. It's one of many.

different lawsuits META was facing over. the past year on this question of social. media addiction, but just remind. listeners what it was about this case. and those like it that felt different. than past legal challenges that social. media companies like Meta have faced. >> Yeah. When KGM testified on the stand, she talked about things like body image. issues, thoughts of suicide, self harm,

all attributed to her constant use of. Instagram, Tik Tok, YouTube, and how she. would go down these rabbit holes that. led to body dysmorphia and real social. anxiety and depression, and how in many. ways she lost her childhood by being on. social media so much and for so many. hours really in the day. And when she. was talking, I think what in our. interviews with people there and the. jury later, everybody could relate if.

they directly weren't affected. They. knew somebody who did have somewhat of a. similar experience where they just knew. that they had an unhealthy relationship. with social media apps that they were on. too much. And you look around anywhere. and you see teens that are glued into. their phones and it just makes people. uncomfortable. and all of those personal. experiences and the testimony we heard. from KGM. What that did was it put a. face on some theories that Meta has just. very defiantly rebuked in public has.

said that they just not true. You can't. prove that social media causes mental. health harms. But to hear her stories. and the stories that a jury agreed with. and and bought really and sided with. unanimously. showed that the public was in a very. different place than Meta was. The. public was in a place where they were. pretty angry at social media and the. reputation of Meta was on the line. So. from what you're saying, Meta in a case.

like this is losing in the court, but. not just in the court. It's kind of. losing in the court of public opinion. But what was it about the legal argument. in this case, which you just said was. successful against Meta that proved so. potent? >> So what KTM was arguing was that she was. personally injured. Her legal argument. was a very basic tort argument of. personal injury. That's essentially like.

like suing a crib maker for a broken. crib or some other sort of product. default. >> What Meta was relying on was a legal. shield that it relies on all the time. and every internet company has relied on. for decades to protect itself from any. sort of legal liability for the content. that it hosts. It is essentially a. speech shield known as section 230 of. the Communications Decency Act and it's. been an extremely successful tool and.

powerful tool used by the internet. industry. >> Right? We've talked about it a lot on. the show. Basically, the argument goes, we're not responsible for the awfulness. of what people post on our platform. We. are just a platform that hosts that. awfulness. Therefore, we cannot be held. legally liable for the bad things that. happen downstream of that awfulness. >> That's right. and Meta went into this. trial and others preparing to use that. shield. And the section 230 shield that. they evoked yet again just did not work.

in this case because the plaintiff KGM. was simply saying this is not about. speech. You have a technology that is. defective and that gets around the. speech arguments. And the jury agreed. that this was a problem with the tools, the technology that Meta and in this. case YouTube had used to get users to. come back more and more often for. compulsive use. So there was almost like. the two sides were were speaking in.

different languages and the language of. the young woman won out. So, how exactly. does Meta losing this lawsuit from KGM. end up bringing us to Wednesday's. historic settlement with dozens of. states around the country. >> So, with that loss and another big one, they were on a losing streak and the. wall that had protected them for so long. was beginning to crumble. And the state.

AG's also wanted to circumvent the. section 230 claim of this being an issue. about the content that the company. hosts. They say, and it's a really. simple argument, that the company. violated state consumer protection laws. by saying their product was very safe, but knew that it really wasn't. So, they. said it was deception claim. And they. also claimed that the company violated. federal child privacy laws. So at this. point, Meta is not feeling as confident.

about his chances in court against the. states. They were willing to come to the. negotiating table ahead of this big. trial with the state attorney generals. because for the first time they were on. their heels when it came to legal. strategy and their legal position.

We'll be right back. Cecilia, as we get into the details of. the settlement, I want to start with the. dollar figure of $17 billion. Is that a big amount of money? The. context that comes to my mind is that. Meta is worth $1 trillion. >> Look, I never like to say that a few.

billion dollars here or there is not a. lot of money because it feels like a lot. of money and it is a record for the tech. industry by state attorneys generals to. reach a settlement of this amount. And. it also is the largest settlement by a. coalition of states just after the. tobacco settlement of 1998. So this is a. lot of money. The other question you had. was, is this a lot of money for Meta? In. the grand scheme of things, no. $17.

billion is arguably not a lot of money. for Meta because they made $200 billion. in revenue last year, but they're. potentially on the hook for a lot more. because they face thousands of more. lawsuits and those people who are suing. Meta are watching this settlement. agreement and they're wondering how much. they might be able to get as well. So, the number can go up and Meta does not. want to fight forever legal wars. So.

they will be motivated to settle. >> So in total, this is just perhaps the. tip of the iceberg. >> Understood. So let's now turn to what. feels like the real heart of this. settlement, which are the restrictions. Meta says it will now be imposing on its. own social media products. And let's. start with something like the 2hour time. limit that it's going to be putting in. place. Where do you think that number. comes from and how meaningful is it? So. that number comes from social science.

research that shows that if left to. their own devices, kids will stay on. social media for a long time. Not all. kids, but there is a meaningful number. of kids who cannot regulate and they. stay on for hours. >> Meta will say that the vast majority of. teens on their site do not stay on for. even two hours. But they also know that. there are many teens still who spend. just simply too much time, >> right? Super super users. Yeah, super. users, the Uber users. And this is meant.

to address that problem. The kid who's. just holed up in their room on the. weekend for hours and hours and comes. out kind of in a daysaz because they've. gone down rabbit holes all day on. whatever interest they have. >> So that addresses the question of time. on these platforms. talk for a moment. about the measures Meta is taking that. relate to self-esteem, getting rid of account on likes for. younger people, getting rid of beauty. filters, and exactly how that works and.

whether that is seen as really reducing. some of the risks that people like KGM. identified in her lawsuit against Meta. >> Yeah, in some ways KGM's the perfect. case study. What happened with her is. that as she was using these third-party. beauty filters actually on Instagram, it. just really fed into her own body image. issues and she also was getting deeper. and deeper into these rabbit holes.

looking into content that dealt with. physical appearance and it just really. affected her negatively in terms of how. she viewed herself and her developing. self as a teenager. M. >> and when it comes to those like counts, it's a really important measure because. when a teenager posts something on. Instagram, they are constantly seeing. how many likes they get. And for. teenagers, there's been numerous studies. that show that that's caused a lot of. anxiety. It becomes a very unhealthy.

desire by young people to see that. number go up. And by eliminating that. feature, it will hopefully address some. of that anxiety that teams feel. Will it. be a panacea for all the features that. are known to be addictive and lead to. compulsive abuse? That's really unclear. because there are so many things that. have been engineered into these sites to. keep teens hooked and keep them there. longer. So, what we're seeing is the. beginnings of some remedies. How would.

this actually work, do you think? Would. these restrictions we're talking about. be placed on the version of Instagram. that's designed for teenagers? And when. it comes to something like this 2-hour. time limit, would Instagram just cut you. off after 2 hours? Would it give you any. kind of a warning or what? >> This change really is directed at just. teens. So, yes, it'll be notifications. It'll be a reminder you've been on too. long. It'll be possibly restriction. All of these specific changes are going. to be rolled out within months. But as.

of now, we know that these are not. changes for all of its users, is. directed just to teens. And if you are a. teen and you're registered teens, it'll. be a default. >> But the inevitable question, how will. Instagram know if you're a teenager and. you're just using regular old Instagram. and you haven't told Instagram how old. you are? >> Well, I mean, this is the key here. In. the settlement, they said that they're. going to strengthen what's known as age. verification tools. But historically, Meta and just about every other internet.

company has been really. just not very good at that. They've just. really struggled with doing that. Kids. are really, really good at getting. around age verification tools. And it's. not even just that kids are cunning. It's often times age verification is. just too easy to get past. It's just a. simple drop-own box that asks how old. you are and then there's no proof that. you have to provide that you are that. age. >> Has Meta given any specifics to the. attorneys general in the settlement.

about what this age restriction system. might look like? In Europe and other. places, there is literally an AI selfie. that you have to take to prove your age. to use certain websites. I mean, it. seems like the technology is out there. >> Yeah, there's not a lot of detail right. now. And you mentioned something really. important is that in places where say. photos are used for verification, that's. going to be a really tricky legal. question for these states and the.

companies because. >> the more information you provide to. verify age, the more you run up against. concerns of privacy and whether you're. collecting too much data about young. people. So that's a detail again that. will really matter in terms of. understanding just how much teeth some. of these product changes actually have. I know that the details of this are yet. to emerge the specific way that these. new restrictions are going to work. But. let's assume for a minute that to some.

degree they do work and suddenly a large. group of young people who are used to. unfettered access to these apps suddenly. find that their time on them is really. restricted. It strikes me that that's a. little bit like telling somebody who. drinks a lot every day and is maybe. addicted to alcohol. that suddenly they're cut off after one. beer. And if this is truly addictive, then being cut off like that could be.

pretty difficult, I imagine, for some. young people to deal with. And what do. they do? Do they just go to Tik Tok? Do. they just go to Snapchat? >> It's a great point, Michael. And. actually that's Meta's argument in the. settlement that the states really need. to strike a similar agreement with all. the other social media platforms. They. can't be the only one out there because. you'll just see teens migrate to other. sites is what Meta says. >> And if I were to venture a guess, I.

would say that you will see the other. social media companies negotiate. I. cannot imagine why they would want to. fight when they're facing the same. arguments that Meta also was facing in. this trial against states and the other. trials that they face. >> Mhm. Well, in a world where suddenly all. of these social media companies have. reached big sweeping expensive deals. with state attorneys general, which it. sounds like could be a reality in the. next few months or years. The.

observation I have, and perhaps it's not. all that earthshattering to you, is that. the federal government, especially. Congress, is not doing anything in this. situation. And they could have imposed. the kinds of restrictions on social. media companies that we're talking about. at any moment over the past 20 years and. didn't. And everything we're talking. about here has really stemmed instead. from the public, from teenagers, their.

parents testifying in these trials, bringing these lawsuits, and then the. jurors who are returning these verdicts. against these companies. >> It's incredible, Michael. I've been. covering tech policy for decades now and. I've seen Congress debate promise and. battle over internet regulations for all. that time and the net result has been. zero regulations. What I've seen with these cases, these.

lawsuits, is big changes in terms of. settlements and verdicts that have held. these social media companies to account. And they've done this within the span of. about six months when Congress has been. working on this for years. And. >> to your point, it has been people. It. has been the public, the general public. that is making these decisions. And. while there's a lot of impatience about. what's happening in Congress, the people.

are not waiting. I want to end Cecilia. with a question about the rest of us, the not teenagers and not kids, because. this settlement was all about young. people. But if apps are as addictive as. these lawsuits claim and to some degree. as the companies internally do seem to. recognize, then how should we think. about the risk to adults and when we're.

supposed to get cut off from these apps? I'm curious about how you think of your. own use as you you ask that question. because. >> don't ask I mean I I I literally ask. that question because there are nights. where I engage in the endless infinite. scroll and I I almost wish someone would. take the thing away from me. >> Yeah. So, I want to go back to tobacco. And the reason why I do is that when. those lawsuits began, when the. challenges began, there was a general.

agreement in the public that cigarettes. were like marginally bad. Maybe, but you. know that maybe these lawsuits were. overreaching. >> Look at where we are today and the. change of consumer behavior. I think. through these lawsuits, discovery, regulations, what happened is that the. public woke up and they realized. actually there is net zero good when it. comes to smoking cigarettes. And when it. comes to social media, we may not get to. a net zero good impression about social.

media, but certainly we're getting to a. place where there is a lot more. awareness of the harms and people are. saying that they feel much better when. they're not online. they're. self-regulating. I see this anecdotally. all the time, people just leaving their. phone at home and not taking them into. restaurants, that kind of a thing. So, it's really on all of us. It's kind of. like put a mirror up to yourself. >> And it could take time, but as I look at. the cigarette industry and what happened.

with big tobacco, that might be a road. map, albeit a very long timeline on that. road map, but a road map, >> right? these settlements, the publicity, they filter through the culture. >> Yes. >> Well, Cecilia, truly, thank you very. much. >> Thanks so much, Michael.

We'll be right back. Here's what else you need to know day. On Wednesday, terrifying floods on the. border between Nepal and Tibet killed at. least 160 people and possibly many more.

as they swept away homes, cars, and. people in their path. Scientists said it appeared that an. enormous chunk of ice, possibly a half. mile wide, had snapped off a glacier. high up in the Himalayas and tumbled. into a river valley below, triggering. the deadly floods. And US regulators have approved the.

first drug to substantially extend the. lives of patients with pancreatic. cancer. Long seen as one of the most. hopeless diseases in medicine. The drug. taken as two pills a day is not a cure. for the deadly cancer. But in a key. clinical trial, those who received the. treatment lived twice as long as those. who got chemotherapy. Today's episode was produced by.

OliviaNat, Michael Simon Johnson, and. Jack Didoro. It was edited by Rob Zipco, and Rachel. Quester with help from Liz O Balen. Contains music by Diane Wong and was. engineered by Chris Wood. Our theme. music is by Wonderly. That's it for the daily. I'm Michael.

Borrow. See you tomorrow.