The out-of-court settlement that Meta reached on Wednesday with a coalition of prosecutors from dozens of U.S. states, under which it agrees to pay up to about $18 billion over roughly 10 years, may seem like a blow to Mark Zuckerberg’s company, but it is barely a scratch. In the same Wall Street trading session, the market already returned a market value increase of 1% – which represents between 122% and 86% of what it may end up paying the states depending on the agreements reached. The algorithm that supports the business model will not be affected despite the time and age restrictions the company has committed to. In any case, the agreement only binds the tech company in U.S. territory and not elsewhere in the world.
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After ensuring there is no economic collapse or judicial ban, another goal of Meta’s lawyers was to maintain a business model that generated nearly $60.8 billion just in the last quarter. This involved keeping the algorithm as the default in the pact, the system that causes users of its social networks, whether adults or minors, to develop addiction.
Meta’s agreement with prosecutors includes the creation of a feed that is not personalized. That is, not driven by the algorithm according to the user’s profile. This could be a serious obstacle to Meta’s commercial line, but its negotiators managed to ensure this option does not appear as the default, thus guaranteeing that what will appear on each teenager’s screen will initially be what hooks them the most. It will be difficult to convince them to switch to the non-personalized option, although there is always the possibility that parents impose it through parental controls. If prosecutors had insisted on the feed being non-personalized by default, Meta would be less satisfied.
“The payments are a trifle compared to the profound harm that Meta’s addictive features, driven by profit motives, have inflicted on our children”
One of the most significant reactions to the pact came from Florida Attorney General James Uthmeier, who announced he would not join the agreement: “The payments to the states are a trifle compared to the profound harm that Meta’s addictive features, driven by profit motives, have inflicted on our children.” “This agreement,” he noted, “is nothing more than a slap on the wrist for a trillion-dollar corporation that has already paid its lawyers more than it will pay the states.”
Arturo Béjar, former Meta engineering director and the first witness to testify during the trial – which was interrupted by the agreement – stated that the agreement is a “significant milestone,” but parents should not consider Instagram safe for children now. “One thing is to say: ‘yes, you can only consume alcohol or smoke for about two hours a day,’ but it is still just as harmful to you because of what they are offering.”
The time restriction accepted by Meta, with a maximum of two hours daily between Instagram and Facebook, is the one that most affects its advertising model, since with less time, social networks will have fewer viewing opportunities and fewer ad impressions, which should translate into lower revenue volume.
The agreed two-hour daily limit for minors will become just one hour if YouTube and TikTok join
The two hours agreed upon will be reduced to one if other involved networks, YouTube and TikTok, end up accepting these conditions. In fact, Meta focused on its competitors as the possible benefit for minors’ mental health, pointing out that it would be of little use to restrict some platforms and leave others freely accessible.
The acceptance of blocking notifications to minors during the night – from 10 p.m. to 7 a.m. – and during school hours – from 8 a.m. to 3 p.m. – also affects Meta, which thus sees the potential of two broad consumption windows fueled by these alerts eliminated.
But despite the time restrictions, the key to the agreement lies in the so-called feed (stream, timeline of posts) that minors receive.
Other measures will include interruption alerts as usage time thresholds are reached. There will be warnings at 15, 60, and 90 minutes of use. One of the keys to addiction is that the user loses track of time. There are no clocks or windows in Las Vegas casinos. The effectiveness of this measure is unknown.
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According to the agreement, Meta will also hide the likes on each post from minors. This may reduce the need for social approval and the reward loop that leads to new interactions.
One of the most complex measures is the improvement, promised by Meta, of the age verification system, which must better identify teenagers aged 13 to 17 who pretend to be adults. The company also asks Apple and Google to apply this in their app stores as a first filter to prevent installation on their phones. As always, the responsibility lies with someone else.
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