What Meta Actually Bought With An $18B Settlement

[Cindy Hau]

It’s satisfying to watch a company you don’t trust get punished. When Meta settled with 52 state attorneys general last month over child safety, a lot of people who care about kids online felt something like relief to see meaningful consequences: the company will pay up to $18 billion and change how their products work for teenagers. Some have called it Big Tech’s tobacco moment, the same kind of reckoning that once forced the cigarette industry to change. Mike Masnick doesn’t buy it. He’s the founder and editor of Techdirt, which has covered tech policy since 1998, earning him a reputation The New York Times once summed up as “something of a Silicon Valley oracle.” He argues that this settlement isn’t a defeat for Meta but the payoff on a decade-long strategy, dressed up as accountability. In this Q&A, Mike walks through what the settlement actually locks in — for competitors, researchers, and the kids it claims to protect — and what a better path might look like instead. Question: What’s the critical issue? Mike Masnick: Social media is not nicotine, and Meta’s recent settlement is not tech’s “Big Tobacco” moment. Meta has spent a decade looking for a regulatory moat to fend off competitors, and with this settlement, they got one. The technology companies are widely disliked, and for good reason, so this settlement can feel like something to celebrate: Meta is being punished and the product changes generally sound positive. But this settlement is no cause for celebration. For years, Facebook has struggled to get younger users. Instagram has been successful, but even they have struggled at times, especially against upstarts like TikTok. And so Meta initially responded by buying up rivals — Instagram and WhatsApp were acquisitions — and then they copied features from Snap and TikTok. But at Meta’s size, the company can’t keep growing, so they’ve been looking to use regulatory policy to insulate the company from competition. The thinking is: if policy raises compliance costs high enough, then only big companies like Meta and Google can absorb them. The smaller upstarts can’t, and they won’t become a competitive threat. Q: What does research tell us? Mike: The research into the impacts of social media doesn’t provide evidence of inherent harm, and so the analogy to tobacco doesn’t work. Social media is fundamentally a communications product, not a commodity with toxins you ingest, like cigarettes. Social media can often be incredibly powerful and useful, especially for people in marginalized communities. People in the LGBTQ community, for example, are known to use social media to connect with each other, help them feel like they’re not outcasts, and remind them that who they are isn’t a problem. The same is true for people with medical problems or disabilities, who find life-saving solutions and community online. Social media is not an inherent harm to these people — before it, they were often isolated, ignored, and suffered greatly The language o “addiction” is also worth pushing back on. Yes, some people use social media too much, but in most cases it’s a bad habit, not a physiological addiction. A 2025 study in Scientific Reports found that when people are told frequent social media use is an “addiction” rather than a “habit,” they feel less in control of their own use and blame themselves more for it. How we define the problem changes how we solve it: there are tools for breaking a bad habit that look nothing like treating an addiction. Q: What does this settlement lock in? Mike: In isolation, the product changes here (such as time limits or hiding “like” counts) sound reasonable. But with this settlement, Meta is now establishing the industry standard even though we don’t know if these changes actually lead to better outcomes. If you don’t trust Meta — and I don’t — this should worry you: the compliance costs and liability risks in this settlement are so high that smaller competitors, the ones who actually care about child safety, will get priced out entirely. Meta has effectively locked itself in and handed itself the market for children’s community spaces. That’s one kind of lock-in. Meta got another: data. Giving kids a different, safer experience online means first verifying who’s actually a kid — which means trying to identify everyone online. Any verification system collects huge amounts of private data, which then becomes a target that’s vulnerable to breaches, like the recent suspected hack of IDScan, and a temptation for any company that holds it: data that is collected for one purpose almost always gets used for other purposes. And so now Meta will have yet more data, not just on children but on everyone, which will lock in yet another competitive advantage — while being justified as child protection. Q: What happens to accountability from here? Mike: If you’re working at a tech company now, the message you’re getting is: stop studying your impact on children. Because if you find anything, it becomes the smoking gun. The best way to avoid a newspaper headline that says, “they knew they caused harm,” is to stop looking for the harm. When Frances Haugen leaked the Facebook Files to the Wall Street Journal, some documents looked damning. One that got a lot of press was about an internal Meta study that seemed to show that Instagram makes teenage girls feel worse about their body image. That study was seen as a smoking gun: Meta knew it, and did nothing. But look beyond the headline and a different picture emerges. Meta released the annotated decks, and if you read the full presentation about the study, the researchers examined 12 indicators — like self-esteem, happiness, stress, body image — for boys and girls. For boys, all twelve came back positive. On eleven of the twelve, girls who said they struggled with that issue also said Instagram made it better rather than worse. Body image was the one exception, and only barely — a thin margin from a small sample. Researchers... Read more »

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