- Face the future - 28th August 2026
- Tastey - 28th August 2026
- In the mind’s eye - 27th August 2026
For our Editor, Welshman Phil Parry, the use of social media like Facebook (FB) (whose parent company is ‘Meta’) is central, as every story on The Eye is also published on FB, so he looks on with interest as the company settles for billions a claim that its service harmed children.
Apparently the legal travails of these huge social media firms, make no difference to investors.
The share price of Meta (the parent company of Facebook [FB], as well as other social media giants such as Instagram [I]), barely budged after it agreed to pay a gargantuan sum to settle a huge legal case in which it was alleged its platforms harmed youngsters.
This may be because costs had already been factored in, and it was just the latest (although largest) legal case to hit the behemoth, so in the minds of investors social media firms like this remain a good long-term bet.
Such is the strange world of the stock market!
It all began on August 18, when 29 American states teamed up to sue the company, alleging that its platforms put youngsters at risk, and that it KNEW of the damaging effects. The four states leading the effort as plaintiffs were seeking as much as $193 billion in damages. Then, on August 26, Meta and the attorneys-general filed a settlement agreement.
In it Meta agreed to pay $12 billion, and as much as $17 billion, over the next 10 years.
The company has also agreed to various ways in which it will now restrict use of FB and I in the United States of America (USA).
Meta will adopt new processes to pinpoint the age of all users.
For teens under 18, the total time they can spend scrolling will be capped at two hours a day, with a blackout period from midnight to six am, and there will be no notifications from 10 pm to seven am, nor during school hours.
Measures of engagement with posts, including ‘likes’, will be hidden for them, and they will be offered the option of switching to an algorithm-free chronological feed on I that shows photos only from accounts they choose to follow.
Even so this huge case has been likened to the one against big tobacco 30 years ago, Rob Bonta, California’s Attorney-General, said as much, describing the case as Meta’s “tobacco moment”.
Mr Bonta declared: “This is a major moment to clean up an industry that has been hurting our kids”.
But Meta denied any wrongdoing as part of the settlement, and said that the payment it agreed to “will be distributed in annual instalments over a 10-year period”.
Judge Yvonne Gonzalez Rogers approved the settlement, writing that it “reflects a fair, reasonable, comprehensive, and good faith approach not only to provide monetary relief, but importantly, to change conduct in a way that attempts to meaningfully address the negative impacts of the social media platforms at issue”.
However despite its size, comparing this case to the action against big tobacco might be flawed.
The supersized settlement reached against big tobacco firms in 1998 involved a monetary penalty larger than their combined market value at the time.
Yet in one, rather disturbing, sense the analogy could turn out to be surprisingly apt.
Even after these settlements, tobacco firms went on to generate huge profits.
For example, investors who in 2000 purchased stock in Altria, then called Philip Morris, would by now have generated a 36-fold return, including dividends.
Teens may soon be spending less time on Meta’s platforms, but it is a long way from being humbled.
So, for the time being anyway, The Eye have no choice but to use FB – and you’ll find all our stories on it…
The memories of Phil’s astonishing 43 year award-winning career in journalism (which started long before the era of social media), as he was gripped by the rare neurological disabling condition, Hereditary Spastic Paraplegia (HSP), have been released in a major book ‘A GOOD STORY’. Order the book now!
Next week, ‘Investigation report part two’ – and how for Phil the importance of the kind of investigative journalism he undertakes has always been fundamental, now this is underlined by news today coming out of the Ukraine war, where a small media site has calculated that the total number of troops from a supposed ally of Vladimir Putin is NOTHING like as high as has been described.
