Meta Reaches $18 Billion Settlement Over Claims It Harmed Teens

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Sabrina Siddiqui (0:18)

Meta has reached an $18 billion settlement over social media's harm to teenagers, and it could mean big changes for how kids use the internet. Plus, the FDA approved a breakthrough drug for one of the deadliest cancers.

Xavier Martinez (0:33)

In talking to oncologists and researchers, this doesn't seem like something that happens every year or even every decade.

Sabrina Siddiqui (0:41)

And the FBI took down a sprawling Chinese hacking network whose targets included NASA, the Fed and the Senate. It's Wednesday, August 26th. I'm Sabrina Siddiqui for The Wall Street Journal, filling in for Alex Osala.

This is the PM Edition of What's News, the top headlines and business stories that move the world today.

Meta has agreed to an $18 billion settlement with nearly all states in the US over claims that Facebook and Instagram harmed teenagers. It ends a massive federal trial in Oakland, California that was just getting started. As part of the deal, Meta will limit time on its apps to two hours a day for users who are under 18 years old. There's also a nighttime shutdown and a school mode that blocks notifications during class hours. Meghan Bobrowsky, who covers Meta platforms at the Wall Street Journal, has the latest. Meghan, why did Meta settle now?

Meghan Bobrowsky (1:35)

Meta has been facing a lot more of these trials, and they've lost two big ones already. This was the third one and arguably the biggest one that they've had this year, and it could have ended in $200 billion plus of liability for them.

Sabrina Siddiqui (1:52)

What changes will people actually see on Facebook and Instagram, and how big of a difference could that make in how people use these apps?

Meghan Bobrowsky (1:59)

There won't be any changes for Meta's adult users on Instagram and Facebook, but for users who are under the age of 18, there's all these settings that they're going to have that already exist on an often basis. This is now going to be the default, so having a lot of push notifications disabled, having like counts hidden, and it will give teens a little pop-up every 15 minutes that they've been using the app, and will tell them when they've hit an hour and when they've hit 90 minutes, two hours of course being the limit for the day.

Sabrina Siddiqui (2:31)

But other apps might have to make changes too, right? Because this deal has a unique structure. Meta only pays out the full amount if TikTok and YouTube agree to similar restrictions and payments of their own.

Meghan Bobrowsky (2:41)

When I reached out to both of the companies, neither of them provided the statement to me, so we're not exactly clear on how that went down or if those companies are going to participate in this. Meta is now trying to get TikTok and YouTube to join them in a settlement that Meta has already agreed to.

Sabrina Siddiqui (2:59)

Meghan, at the risk of aging myself, Facebook came out when I was in college and Instagram not long after that. I've been using these apps on a day-to-day basis for almost two decades, so I'm constantly thinking about how my kids will interact with these platforms.

How much of an effect could these limits have on the next generation of social media users?

Meghan Bobrowsky (3:19)

That's like the million-dollar question, right? We actually don't know what it looks like to have this more measured relationship with social media. That's going to be one of the really interesting things to see play out over the next few years.

Sabrina Siddiqui (3:30)

That was the Wall Street Journal's Meghan Bobrowsky. Thank you, Meghan.

Meghan Bobrowsky (3:34)

Thanks for having me.

Sabrina Siddiqui (3:38)

Elsewhere in tech, NVIDIA reported another blowout quarter after the market closed. Its sales came to just over 96 billion dollars, beating Wall Street expectations. Its profit also topped estimates. But investors sent shares down in after-hours trading. For more on the chipmakers' earnings, go to wsj.com. And we'll have more analysis on tomorrow morning's show.

And we're exclusively reporting that US officials say they've shut down a big hacking operation tied to China. The hackers targeted networks at NASA, the Federal Reserve, the Department of Energy, and the Senate, as well as power companies and hospitals. The operation hit its tracks on a global network of hacked devices, cloud computing infrastructure, and even clandestine networks. The FBI says a Chinese company has run the group since 2018