Six days before the start of a federal trial over online child safety, C.J. Mahoney, Meta’s chief legal officer, traveled to Nashville on Aug. 6 to meet with lawyers for about a dozen states. He wanted to broker an enormous settlement, two people familiar with the conversation said.
Meta had already suffered losses in court this year over claims it created addictive products that harmed young users. Mark Zuckerberg had endured a full day of grilling on the witness stand during one of those trials. (“You’re mischaracterizing this,” he kept repeating.) He was likely to be questioned again at the federal trial in California, in which a coalition of states had sued Meta, arguing that the company had contributed to a national child mental health crisis.
Over bagels and coffee in an Art Deco office on Tennessee’s Capitol grounds, Mr. Mahoney presented his terms, which Mr. Zuckerberg had personally approved, according to four people familiar with the negotiations. Meta would pay the states up to $19 billion and make changes to its platforms to improve teen safety. Some of the payment would be withheld unless all states joined and other social media companies also settled.
For the states attorney general in the room, the offer was intriguing. They had been negotiating with the Silicon Valley giant for months with little progress, the people said. On Tuesday, 47 states — two had dropped out of the lawsuit — the District of Columbia and several territories agreed to a settlement worth roughly $17 billion.
“There’s a saying here in Tennessee,” Jonathan Skrmetti, the state’s attorney general, said in one of the meetings with nearly all the state attorneys general, encouraging them not to get greedy. “Pigs get fat, and hogs get slaughtered.”
The settlement, one of the largest agreements between a company and a group of states embroiled in litigation, was announced on Wednesday. This account of how it came together is based on a dozen interviews with state leaders, former and current Meta executives, court documents and trial testimony.
For years, Meta, which owns Instagram and Facebook, seemed to have an impenetrable defense against child safety lawsuits. The company’s aces were Section 230 of the Communications Decency Act, a 1996 law that protects platforms from liability over what users post on their sites, and the First Amendment, which protects free speech.
But concerns have mounted globally over the harmful effects of social media on children. Australia last year became the first country to bar children under 16 from using social media, and many other countries carried out or are considering similar rules.
In the United States, a flood of online child safety lawsuits have been filed since 2022, and the plaintiffs focused on a new argument claiming that social media sites designed their products in a harmful way that violates consumer protection and other laws.
The suits accused the companies of knowingly creating sites that were as addictive as cigarettes, taking a page from a strategy used against Big Tobacco in the 1990s. Suddenly, relying on Section 230 didn’t look so safe.
At Meta, concern was growing about the cases, according to two people familiar with thinking inside the company.
In January, Meta hired Mr. Mahoney, a veteran litigator who had been general counsel at Microsoft. Mr. Mahoney, who reports directly to Mr. Zuckerberg, took the position of chief legal officer in part because he was attracted to the prospect of negotiating a settlement, one of the people familiar with Meta’s thinking said. He had negotiated complex deals in the past, most notably in 2020 when, as deputy U.S. trade representative, he was a lead negotiator of the Trump administration’s trade deal with Canada and Mexico.
Just days after starting his new job, Mr. Mahoney called Attorney General Phil Weiser of Colorado and Mr. Skrmetti of Tennessee, the lead negotiators for states, to begin settlement talks, four of the people familiar with the conversations said. Mr. Mahoney, who is based in Silicon Valley, flew out to meet them separately in their states. He wanted to explore a grand settlement that would end federal and state cases brought by all of the nation’s attorneys general.
The two sides had held previous talks. But the tenor of the conversations changed because Mr. Mahoney seemed so clearly interested in reaching a resolution.
But a roadblock immediately became apparent because Meta was reluctant to make some changes to its products, three of the people said. That was a nonstarter for many of the state attorneys general.
“We brought these suits because we wanted to protect kids and we wanted to reform the platforms,” Mr. Skrmetti said in an interview. Forcing changes to the platforms “is really the most significant part here.”
Every attorney general was familiar with an instance of a child’s facing harm from social media, Mr. Weiser said in an interview. “The shared commitment to do something was rooted in the pain that all of us recognize, the fears that all of us had,” he added.
The talks dragged. But within weeks, Meta received a harsh reminder of the potential problems ahead.
A young woman identified as K.G.M. took the stand at a trial that began in late January, making accusations that social media companies had created features on their platforms like infinite scroll that had led to her anxiety and depression.
The defendants, Meta, Snap, TikTok and YouTube, had argued in pretrial hearings that the case should be scrapped because of Section 230. But the judge, Carolyn B. Kuhl of California Superior Court of Los Angeles County, ruled that the case was about product liability, not speech.
The five-week trial was deeply embarrassing for Meta. Mr. Zuckerberg testified for the first time about child safety in front of a jury. He was grilled about allowing millions of underage users on Instagram. Parents who said their children were harmed by social media packed the courtroom. Internal documents presented as evidence showed Meta’s employees comparing themselves to drug pushers.
Simultaneously, New Mexico’s attorney general was trying a case in state court charging Meta with violating consumer protection laws.
Within two days in March, Meta lost both cases. The decisions raised questions about reputational harm that future trials could inflict.
The stakes were getting higher, as Meta and California, Colorado, Kentucky and New Jersey geared up for trial this summer in U.S. District Court for the Northern District of California in Oakland. The states had accused Meta of violating consumer protection laws and child privacy protections, seeking roughly $200 billion in penalties and changes to the company’s platforms.
Mr. Skrmetti and nearly all the other states attorney general had also filed their own cases.
But in the ongoing talks, Meta still wasn’t meeting all the states’ demands on safety features.
On the eve of the Oakland trial, Meta made a last-ditch effort to kill the case. The company asked the U.S. Court of Appeals for the Ninth Circuit on July 22 to throw out the social media addiction cases, invoking legal protections under Section 230.
As Meta waited for a decision from the Ninth Circuit, Mr. Mahoney trekked to Tennessee with his $19 billion offer. He left without a deal, but talks continued.
On Aug. 10, the appeals court ruled against Meta. Suddenly the talks sped up, four of the people said. With their new leverage, the states began daily negotiations with Meta’s lawyers in person in Nashville and over video calls, to get final concessions, one of the people said.
As part of the deal, the company agreed to more safety measures. The growing list of platform changes included stopping teenage users from endless scrolling, and imposing a two-hour daily limit on use of Instagram and Facebook. Meta also said it would limit teen use between midnight and 6 a.m. and silence notifications during school hours of 8 a.m. to 3 p.m.
Meta proposed paying more and increasing limits on how much young users could use its platforms if other social media companies, like TikTok and YouTube, agreed to similar controls for their apps — something that Meta said would keep it from being singled out.
The company wanted to avoid going to trial, and had made it a condition that all the states needed to sign on. But on a video call to discuss the proposed settlement on Aug. 11, some state attorneys general asked if the money was enough and how it would be divided, five people with knowledge of the conversations said.
The states came up with an equation to divvy up the fund based on the size of their populations and the individual charges brought against Meta in each case.
The states’ case in Oakland went to trial last week while they were still negotiating with Meta. On Sunday, the Colorado and Tennessee attorneys general presented a final settlement deal to the other states. They emailed the document with instructions to sign by Tuesday at 6 p.m.
That day, Adam Mosseri. the head of Instagram, testified in Oakland. The states’ plan to call Mr. Zuckerberg to testify was looming.
On Tuesday, every state signed except Texas, Florida and New Mexico, ending the trial. New Mexico had already won its case, and Meta settled with Texas on Wednesday for about $1 billion, offering safety guardrails for young users similar to the multistate agreement.
“Section 230 and the First Amendment are not impenetrable shields to holding Meta accountable,” California’s attorney general, Rob Bonta, said in a call with reporters on Wednesday. The states’ settlement shows the limits of the abilities of those laws “to deliver justice and accountability” to “the people, children, families who’ve been harmed by misconduct.”
Mr. Mahoney said in a statement on Wednesday that he was proud of the agreement and the power it gave parents to protect their children.
“But its success depends on all other social media platforms following Meta’s lead,” he said.
Meta still faces thousands of other suits filed by teenagers, families and school districts. The next major personal injury trial is scheduled to be heard in California Superior Court of Los Angeles County in October.
Meta said it was confident it could win the case.
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