Meta's landmark settlement in its child safety trial will precipitate the most significant change to its social media platforms for teen users ever.
The social media giant's settlement with more than 40 states plus the District of Columbia and multiple territories, includes up to $17 billion in payments over 10 years, changes to the apps for teens and stricter age assurances."It's the highest amount of money ever paid in a case like this," California Attorney General Rob Bonta, who led the trial, told CNBC in an interview after the settlement. "And $17 billion can do a lot of good to prevent and remediate mental health harms for kids."
Perhaps even more meaningful for Meta, which generated $201 billion in revenue last year, it must implement a range of product changes for users ages 13-17.
The list includes a two-hour default limit for time spent on its app, blocking the apps between midnight and 6 a.m., and muting notifications during school hours. Teen users will also have likes hidden, cosmetic filters disabled, and the option to control autoplay of videos as well as the ability to opt for a non-algorithmic feed.
Meta said it'll roll out many of the default protections in the next six months, but it will take up to a year to introduce age assurances — stricter age verification requirements to keep kids off its platforms and accurately identify teens who have lied about their age.
To address this complex problem, Meta is building a new prediction model to determine users who are under 13 or in the range of 13-17 by pulling in data like who they're connected to, who they follow and who their followers are, as well as the likes of happy birthday greetings.
Age verification — especially without facial recognition, which Meta doesn't use — is notoriously tough. The challenge has prompted a debate between Meta and app store owners Apple and Google about which entity should be responsible. Meta has also been working on age-gating technology in Australia to comply with laws banning social media for kids under age 16, but teens are finding workarounds.
After years of denying that its products negatively impacted kids, Meta's now trying to be a leader in a wave of changes, and is calling on rivals YouTube and Snap to join them.
Meta will pay $5.3 billion of its $17 billion settlement only if TikTok and YouTube agree to pay the same, and also set default limits of an hour on their apps, which Meta said it would then adopt. TikTok and YouTube have not responded to Meta or to CNBC's request for comment.
Not everyone is satisfied with this $17 billion settlement, which is just a fraction of the $200 billion that the state AGs were originally pursuing.
Florida Attorney General James Uthmeier, who did not participate in the settlement and is pursuing separate litigation against Meta, told CNBC he was frustrated with the five-year commitment Meta made for some features and 10 years for others."Child protection is not a short-term, temporary goal. They violated Florida law, and our law is not temporary, it's permanent. These changes need to be permanent," Uthmeier said.
Meta still faces other lawsuits, as do other social media companies, but questions remain about how much the teen changes will affect its bottom line.
Meta has said that teens generate less than 1% of its revenue and eMarketer reports that teens spend less time on Instagram and Facebook than they do on TikTok and YouTube. But the added restrictions could drive teen users of Instagram and Facebook to other platforms without restrictions, impacting Meta's appeal to these teens once they grow into adults, who are far more valuable in terms of ad revenue.
"Kids are extremely valuable to Meta," said Kelly Stonelake, a former Meta director who is now a child safety advocate. "It's actually pretty devastating to Meta's current strategy to limit the kind of hooks that they can put into young people."
Watch the video to find out how Meta will pull off massive changes to its platforms.
