Meta’s $5 Billion Settlement With State AGs Puts a Bounty on Competitors
As the settlement with the state attorneys general currently awaits court approval, Meta’s agreement has been touted as industry-redefining. Meta was the only industry player to negotiate its terms, but the settlement agreement is structured to broadly reshape the social media industry.
Aside from a guaranteed $12 billion payout from Meta, the corporation will dish out an extra $5 billion in bonuses to the state AGs under the condition that these officials limit youth access to Meta’s primary rivals and secure matching settlement agreements. This arrangement establishes a transactional relationship that treats Meta’s competitors as targets and turns the state AGs into enforcement agents for Meta.
The Financial Incentives Behind the Agreement
For years, Meta has urged governments to increase their regulation of social media, provided that any new regulation does not disadvantage Meta more than its rivals. By unilaterally entering into the agreement, Meta exposed itself to the risk of ending up as the only major industry player hindered by the restrictions.
To Meta, leveling the playing field by imposing identical restrictions on competitors carries a value that far exceeds $5 billion, prompting the tech giant to distribute a portion of its monetary gains to the state AGs upon completion of the deal.
Impact on Enforcement and the Rule of Law
Before the agreement was reached, multiple state AGs had already launched enforcement proceedings targeting certain competitors of Meta. However, the quid-pro-quo taints all further social media-related state AG enforcement efforts against those rivals, as judges, juries, and competitors will question whether actions are brought to protect constituents or to cash in Meta’s bounty.
While state AGs have claimed they are working to protect children in their states, the arrangement demonstrates that justice is for sale, degrading the rule of law. This provides a good reason for the courts to think carefully about whether the settlement should be approved.