Meta’s Multistate Money Mishap

Washington Attorney General Nick Brown announced today a landmark $17.1 billion multistate settlement with Meta Platforms, Inc., to end litigation alleging the company knowingly failed to protect children on Facebook and Instagram.

Whenever a company settles a lawsuit, the decision to do so is based on a cost/benefit analysis between the proposed settlement terms and the cost of litigation. The approximately $18 billion settlement, when including the estimated cost of the changes they must make internally, apparently made more sense than trying their luck in front of a likely very hostile jury.

Meta’s net revenue ending June 30, 2026 was about $68 billion. Additionally, they have about $90 billion in liquid assets on hand. The settlement payout will be spread out over ten years which makes the yearly penalty $1.8 billion. That’s a stiff fine, but when the projected rate of inflation over the next ten years is between 2%-2.5%, the purchasing power of the US dollar in a decade will have fallen by nearly 22%.

The longer the payout period, the less the penalty that is ultimately incurred.

Sure, but Did They Manipulate Children?

Every product ever conceived, every service ever offered, was designed for maximal attraction. Facebook and Instagram were over time designed to maximize their attractiveness to users so that users remain on the platform. They are glorified billboards, and billboards are worthless if people aren’t looking at them. Meta didn’t need to intentionally target children with the algorithms; whatever technique is used on an adult that works will invariably be more powerful against the less-developed brains of an adolescent.

However, the protections offered for minors likely only filtered out the most explicit of content and did nothing to mitigate the power of the algorithm to inundate minors with legal eye-candy.

Video games are an excellent example of how harmless content can be instantly addicting. A century of psychological research has gone into learning what is most attractive to the human mind, and the gaming industry is one of the most notable beneficiaries of that research. Social media is another beneficiary but to a lesser extent. Social media feeds don’t move as quickly nor are they anywhere as interactive as a video game. They’ve had to supplement the scrolling with hypnotic, high-intensity videos—a reasonable runner up to a good button masher.