The state of Michigan could receive at least $171 million as part of a settlement with the social media giant, Meta, over claims that the company's apps harmed kids and failed to protect user data.
"For too many years, social media platforms have traded our children's mental health for engagement on their apps," Attorney General Dana Nessel said in a statement Wednesday. "It is my hope that this is a turning point for the entire social media industry to prioritize the safety and well-being of children over their bottom line."
Michigan is set to receive funds despite withdrawing from the federal lawsuit in early 2025 due to "overly burdensome litigation costs."
The settlement agreement announced Wednesday in a landmark federal lawsuit against the Facebook and Instagram parent company includes promises to pay the Michigan attorney general's office $15,393,582.07 to settle claims over Meta's work with Cambridge Analytica, plus guaranteed annual payments of $17,164,074.99 for 10 years. Michigan could end up receiving an additional "contingency" payment of $7,397,748.77 each year for up to 10 years. The contingency payment only takes effect if other large tech companies adopt changes to their platforms as well.
Michigan's maximum payment amount could reach as high as $261 million, including the Cambridge payment, if the contingency is met.
Michigan's share would come out of a maximum settlement of $17.1 billion to 47 states, three U.S. territories and the District of Columbia.
The legal challenge from states is one part of a mass of lawsuits against the social media giants that include thousands of lawsuits from individual users and lawsuits from school districts. Close to 50 Michigan school districts have joined in those lawsuits.
The lawsuits, broadly, claim that Meta knew its apps could be harmful to kids, and prioritized algorithms that engaged users rather than protecting them. The settlement also addresses claims that Meta failed to prevent another company, Cambridge Analytica, from harvesting private information of Meta's users.
In addition to the payments to states, Meta also agreed to changes to how its apps operate, putting in new safeguards to protect young users.
The settlement calls for Meta to:
- Take addition steps to prevent kids under the age of 13 from using its apps.
- Create a default "Night Access Mode" for teen accounts that disables push notifications from 10 p.m. to 7 a.m. and limits access to the app after midnight.
- Limit teen accounts to a maximum of two hours on its apps per day, and institute "productive pause" notifications to alert users after 15 minutes of continuous scrolling, and after 60 and 90 minutes of total daily usage.
- Disable "like" counts on teen posts
The settlement agreement still needs a judge's approval to take effect. If approved, the Michigan attorney general's office would receive the payments, and decide how the money is spent.
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