Meta's landmark social media settlement

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**Meghan McCarty Carino** (0:31)
Good Nvidia earnings actually pleased Wall Street this time. From American Public Media, this is Marketplace Tech. I'm Meghan McCarty Carino.
The chipmaker powering the AI boom reported strong quarterly earnings again this week. And for the first time all year, the markets cheered. So what changed and what does it say about the state of the AI trade? We'll get into it on today's Marketplace Tech Bytes Week in Review. Plus, the EPA proposed eliminating public comment for data center pollution permits. But first, the legal settlement that could change social media.
Meta announced this week it agreed to pay up to $18 billion to settle a landmark trial over social media addiction in teens. It also agreed to add stronger child safety measures on its platforms, like a two-hour limit, nighttime blackouts and hidden likes. Here to discuss is Anita Ramaswamy. She's a financial columnist at The Information.

**Anita Ramaswamy** (1:42)
My first reaction was actually that the settlement amount wasn't as large as I thought it was going to be. If we remember back in the summer, the attorneys general who were suing Meta and leading this charge, had said that they were going to potentially go for as much as $1.4 trillion in damages. Then they later walked that back. They said, okay, actually 200 billion. Now we're getting the settlement where only 12.7 billion of it is actually guaranteed that Meta has to pay. The rest contingent on Snap, TikTok, YouTube instituting similar safeguards to Meta.

**Meghan McCarty Carino** (2:13)
Right.
Meta was expected to publish a full-page ad in several big newspapers. Basically, a call to TikTok and YouTube to join us in supporting teams. So I guess Meta is the moral leader now.

**Anita Ramaswamy** (2:28)
Right.
I mean, the thing about the settlement number, just to put it in context, is like Meta generated more than 200 billion dollars in revenue last year. So the 17 billion, yes, it's a large amount in the context of other lawsuits and other settlements. But in terms of Meta's own revenue and its own cash flow, it's really a drop in the bucket.

**Meghan McCarty Carino** (2:46)
Yeah, exactly. Maybe they got off okay. Of course, I think the big question is, whether these changes to the app are going to be as transformative as they sound, because that would be a major change if it actually does happen across social media, and if it is able to be kind of enforced, which is the big question.

**Anita Ramaswamy** (3:08)
Yeah, which is interesting, right? These changes are still pending judicial approval, so they're not 100 percent finalized. But basically, one of the big ones is that teens on Instagram and Facebook are going to have this two-hour time limit that parents have to turn off. And so, they've made a distinction here between long-form audio and video, which teens are going to be allowed to watch sort of endlessly. They'll also be allowed to message endlessly. But the default setting is going to say if you're doing that endless scroll, if you're watching Reels, you can only do it for two hours. Some of the other changes that are associated with the suit are the app blocking use between school hours and at certain times at night. And so, all of these safeguards are things that parents can still ultimately go in and change and turn off. But if these become the default, it really might lead to a huge shift in how teens are using the platform. A lot of people don't want to go in and change the default settings.

**Meghan McCarty Carino** (3:57)
All right, well, now we want to get to the big financial news of the week. Nvidia earnings, you know, the kind of Christmas that comes four times a year, which actually seemed to please Wall Street this time. Nvidia earnings, as usual, they were great. But for the last several quarters, that hasn't been enough for Wall Street, they've been kind of spooked by all this AI spending. So, Anita, what do you think was different this time?
Why did the number go up?

**Anita Ramaswamy** (4:27)
The funny thing is nothing really was that different. I mean, Nvidia has pretty much every single reporter that they've reported in recent history beat their estimates in terms of how much they say they're going to make. I think that the market has these ups and downs, and there are concerns sometimes about...