State attorneys general spent months in negotiations. Then, as its legal losses mounted, the social media giant’s new top lawyer brought a huge settlement to the table.
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.
