Meta agrees $18bn settlement

**Bisi Adibayo** (0:01)
A multi-billion-dollar settlement for one of the world's biggest social media companies. It's World Business Express from the BBC World Service. I am Bisi Adibayo.
Meta has agreed to pay over 16 billion dollars to settle a US case of a child's safety on Facebook and Instagram. And we remember Dolly Parton, the country music superstar who also built a formidable business empire.
Indeed, we are starting with Meta, which has reportedly agreed to pay billions of dollars to settle one of the biggest legal challenges yet over the impact of social media on children. 29 US states accuse the owner of Facebook and Instagram of deliberately designing its platforms to keep children hooked, while also improperly collecting their personal data. The company denies any wrongdoing, but reports say the settlement could be worth close to $17 billion and include new restrictions on how teenagers use its platforms. Meta says those protections will only truly be effective if rivals including TikTok and YouTube introduce similar measures. Russ Mould is investment director at AJ Bell. Always good to have you Russ. So we're talking $16.6 billion, which is an enormous settlement. But for a company the size of Meta, how significant is it?

**Russ Mould** (1:24)
Hello, BZ. It is affordable. And as of the end of June, the company had $90 billion US dollars in cash on its balance sheet, although we did have some debt as well. And in the second quarter of this year, it made $16 billion in just three months. So it can certainly afford it. And that's probably why the share price is broadly flat on the New York Stock Exchange today. And also partly because analysts did think that the fine could be bigger. Even so, this isn't the only fine the company's got to pay. It's already got nearly $950 million in New Mexico. And there may be more lawsuits coming down the path as well.

**Bisi Adibayo** (1:52)
And how significant is this deal for how Facebook and Instagram will work moving forward?

**Russ Mould** (1:58)
That is clearly what the people who brought the lawsuits want. It's what the court thinks is appropriate. And if you look at any company's business model over time, they generally have to cope with competition, customer disaffection or regulation or all three. And they are the challenges that Meta faces like any company right now.

**Bisi Adibayo** (2:14)
In other news, Ross, so Iran and Oman have agreed a new temporary shipping corridor through the Strait of Hormuz, which is a key route for oil and gas exports. What does it mean for oil prices?

**Russ Mould** (2:25)
I mean, again, it does, in theory, free up supply. The oil price is therefore going down a little bit more today to $87 billion a barrel in the middle of its sort of post-war range. But we've been here before with these deals. We now have to see if it sticks. And also if America and Iran can reach a lasting agreement as well.

**Bisi Adibayo** (2:43)
Ross Mould, investment director at AJ Bell, thank you.

**SPEAKER_3** (2:46)
Thank you.

**Bisi Adibayo** (2:47)
The collapse of what was once one of China's biggest property developers is now threatening to become a multi-billion-dollar headache for PwC. Because now a Hong Kong judge says Evergrande's liquidators can pursue PwC's global organisation as well as its Chinese affiliates over alleged audit findings. And they're seeking around $8.4 billion in damages. Francine McKenna lectures in accounting at Montclair State University in Pennsylvania.

**Francine McKenna** (3:16)
I think that in Mainland China and Hong Kong, regulators determined that the firm was negligent. They've already fined Hong Kong and the Mainland China office. People have been fired. And there were allegations of potential complicity in the activities. Maybe people looking the other way, either by design or default. And so that is the worst case scenario.
In the best case or best worst case, an audit firm can just be negligent in how it conducts the audit. It cannot do all of the things it's supposed to do. For example, we've seen in other cases, Wirecard or other cases with Chinese companies, where the auditor didn't check the bank accounts. They didn't double check to make sure the money was really there. So you can just be plain negligent or you can actually be complicit. And I think regulators have said there's been a little bit of both here.

**Bisi Adibayo** (4:09)
And what about the significance of today's ruling? Because it allows Evergrande's liquidators to pursue PwC International, as well as its local firms.

**Francine McKenna** (4:21)
Right. So when a big company like this blows up, you have lots of different people going looking for fault and perhaps trying to impose some kind of penalty.