Weekend Law: Meta Settles, Trump Outruns Courts & Officer Charged

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0:38This is Bowen Yang from Las Culturistas with Matt Rogers and Bowen Yang. You know when people try a new food and suddenly it's like, okay, hold on, I got a new favorite food. That's the reaction a lot of people are having when they first try Kewpie mayo. Yeah, it's the one with the red cap and the little baby on the bottle. You've probably seen it at the grocery store. And this mayo is different. Most mayonnaise uses whole eggs. Kewpie only uses egg yolks, which gives it this rich umami flavor. It's smoother, deeper, almost buttery. Once people try it, they start putting it on everything. Egg sandwiches, fries, burgers.

1:09Chefs use it. Restaurants use it. People who really care about flavor use it. Put it on just about anything. Then you'll understand. Kewpie, the original Japanese mayonnaise. If you like YouTube, you'll love YouTube Premium. Hi, I'm Sean Evans from Hot Ones, and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi. Background play, so you can lock your phone and it still plays, baby. Oh, and it is completely ad-free. Yes, I said it, ad-free. Try YouTube Premium for two months free at youtube.com slash premium. Trial eligibility varies, terms apply, cancel anytime.

1:51This is Bloomberg Law with June Grosso from Bloomberg Radio. This is a major breakthrough, a milestone moment, a watershed moment, because when it comes to protecting our children's mental health, there is no time to lose. That's California Attorney General Rob Bonta describing the settlement where Meta will pay up to$18 billion and put stronger child safety guardrails on its platforms to end a California social media addiction trial and resolve the claims of 48 states that Meta deliberately designed features to hook teenagers. Under the deal, the social media giant will implement a series of design changes for users under 18, including limiting the time they can spend on Instagram and Facebook to two hours a day, blocking the apps from midnight to 6 a.m., and disabling features such as like counts.

2:53But this doesn't close the book on social media addiction litigation for Meta. It still faces thousands of similar lawsuits brought by individuals, school districts, and Native American tribes. Joining me is an expert in Internet law, Eric Goldman, a professor at the Santa Clara University School of Law and co-director of the High Tech Law Institute. This is being called a landmark settlement. A.G. Bonta said they got as much and perhaps more than they could have in litigation. I mean, how do you view it? The settlement amount is a huge absolute number. There's no doubt that this is a major financial landmark.

3:35At the same time, this number is not a number that materially changes Metta's business. I don't want to say it's pocket change for them, but it's a quarter of their 2025 net income. In other words, they can afford this. And also, I would point out that Meta was subject to a judgment in New Mexico that ordered cumulatively roughly a billion dollars of damages against Meta. And New Mexico's roughly 0.6 % of the U.S. population. If you were to multiply that billion-dollar judgment in New Mexico by the 0.6 population, actually the$17 billion number looks smaller than we might expect. Bonta said that the money was secondary.

4:18What was important was the changes that Meta has agreed to make. Do you think those changes are significant? The changes are important in part because Meta has resisted them for quite some time. And Meta has obviously flipped internally and decided that they could live with these particular changes. So the state AGs were able to accomplish something that regulators around the globe have had difficulty forcing META to do. What's less clear is if these changes are in the best interest of the constituents that the state attorneys general seek to serve. We don't know if any of these changes solve the quote mental health crisis.

5:00We don't know if any of these changes materially benefit any population of users. Simply put, But we don't have science to back up that these changes solve any problem. And we also don't know if these changes will cause other users to have new problems because of the restrictions. In other words, the state attorneys general are gambling that these changes are beneficial to users without having the science to back it up. And we'll find out if they're right or wrong. But if they're wrong, then we're going to have a lot of people who actually have been harmed by this agreement. Will you explain how the changes in the platforms are going to work in practice?

5:45Because the effectiveness hinges on knowing how old users actually are. I've described these categories of restrictions as segregate and suppress. The first step is to segregate the user population between adults and minors. And then the second step is to suppress some resources for the minor population. This agreement codifies that approach. In order to do the segregation, Meta has agreed to deploy age authentication on its user base. And the agreement has very detailed specific provisions about how that age authentication is going to work. Among other things, something that really was interesting to me is that the agreement contemplates that age authentication will never be perfect.

6:28And it actually provides error rates where MEDA can make mistakes and still be in compliance of the agreement. This is really central to the question because it means that there will be some minors who will not be protected by this agreement because of those error rates. And I don't see that as a flaw, but it's actually a big concession by regulators to admit that that could happen. This deal came in the second week of a jury trial in California that posed enormous risks for MEDA. I mean, juries ruled against them in two prior cases, one in New Mexico and one in California. What do you think pushed them to settle?

7:06Well, obviously, the settlement has been in the works for many days, if not for weeks or even months, because it's so long and detailed, and it required the agreement of 51 different state AGs. So this agreement didn't just happen because this trial has been going poorly. This conversation is much longer standing than that. But I don't know exactly what caused Meta to flip on this particular issue, but this is a standard practice for Meta that they will push and fight against restrictions until they decided somehow in their interest and then they're all in and they're like super excited about it.

7:43And as the agreement reflects, and they want everyone else on the same program too. Like they're like, okay, we've decided here's what the industry should do. We'll be the first, but make sure everyone else goes on the program as well. So I don't know what caused Meta to reach that point where they decided enough is enough. But it isn't some new thing. It's something that obviously has been on their minds for a while. The deal includes the appointment of an independent auditor to oversee compliance, someone who can issue their own recommendations and report findings to the states. Do you think that that's sufficient to ensure compliance by Meta?

8:19Because I remember some years ago when Meta was still Facebook, it didn't comply with agreements with the FTC over users' data privacy. Yeah, Meta has a history of having independent auditors that have had no real impact on its business. And so I'm guessing Meta thinks it got a little bit of a fast one here, that the state AGs are going to think this independent auditor is going to dictate things to Meta. And I'm guessing Meta is thinking it will dictate to the independent author. Eric, so Meta said the framework will only work if all our peers join us because teens move fluidly across dozens of apps.

9:01We need an industry wide solution. Is that what this is really about? This is a Meta specific issue. Meta really, really does not like being obligated to comply with laws that its competitors don't also have to comply with. So Meta is less resistant to legal compliance. It's more willing to accept that the regulators can tell how to run its business, but only if in Meta's mind, it's a level playing field. So it was absolutely critical to Meta in this case that if it settled, it was going to drag along its competitors, whether they really wanted to be dragged along or not, to the same deal so that teams can't just check out of Meta, go to the competitor down the information superhighway and get a better deal there.

9:50And Meta then is at a competitive disadvantage. And it mattered so much to Meta that they did two things of interest. The first is that it agreed to restrict miners' usage of Meta even more if other competitors agreed to the same restrictions. So that's a carrot for the state AGs to go out and get even greater alleged protection for miners if they can get the competitors under that program. The second thing is that Meta conditioned a large chunk of the payments on the state AGs going out and getting the competitors under the same program. In other words, essentially, Meta has now deputized the state AGs as its police against its competitors and is paying them to do its dirty work.

10:40So the state AGs might think that this is a win, but Meta is also looking at this as we got the state AGs to go off and harass our competitors, and we're willing to pay them to do that. And the California AG did say they'll be going after Meta's competitors next. Meta is part of the industry, a major player in the industry, but there's a bigger ecosystem that we will not be satisfied until we address all of the problems in the entire industry. So we are going to focus on TikTok. We are going to focus on Snap. So TikTok and Snap and probably YouTube will be pressured to make similar deals. The competitors may not like this deal at all, but now Meta and the state agencies are collaborating together against these other competitors.

11:27So I can assure you that YouTube and Snap and TikTok reading this agreement, at each line, you could just see the anger bar rising in their heads because this is an agreement that's against their interest. They had no saying the agreement. And now Meta is throwing hundreds of millions of dollars at this problem to try to get the state AGs to find them. And Meta is still facing thousands of other lawsuits. This settlement doesn't apply to any of the other pending litigation that's been brought by the school districts, the Native American tribes, and by individual victims, of which there are thousands of individual victims who've already sued Meta.

12:08And that's why there's a large overhang of additional legal risk that it still needs to resolve. This settlement doesn't have any bearing on that. Do you have any First Amendment concerns about this settlement? The agreement represents the concession of Metta of certain editorial decisions that it traditionally have the prerogative to make. And it's interesting and a little uncomfortable that the state attorneys general have bound Metta to that. In a sense, part of the bargain for price was the state AGs getting remedies that might very well have not been available to it in court because of the restrictions on free speech.

12:51Essentially, the state AGs are controlling how Metta talks with its users. So there's something disquieting about the idea that Meta and the state agencies have agreed to what are fundamentally restrictions on Meta's freedom to publish, especially when we don't even know if that's constitutionally permitted. One possibility this agreement will look really weird if that question gets answered by the Supreme Court. And the Supreme Court says that states have no power to dictate how online publishers present content to users. And that has agreed to that. And it might very well be that that agreement is based on an unconstitutional premise.

13:29It's more complicated than it initially seems. Thanks so much, Eric. That's Professor Eric Goldman of Santa Clara University Law School. Coming up next, President Trump keeps racing ahead and the courts can't catch up. I'm June Grosso and you're listening to Bloomberg. Berg. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version.

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14:45It's the one with the red cap and the little baby on the bottle. You've probably seen it in the grocery store before. And if you've ever just walked past it, some people would say that's a huge mistake. Because this mayo is different. Most mayonnaise uses whole eggs. Kewpie only uses egg yolks, which gives it this rich umami flavor. It's smoother, deeper, and almost buttery. Once people try it, they start putting it on everything. Egg sandwiches, Fries, burgers. Some fans even swear by dipping pizza crust in it. And once you notice it, you start seeing it everywhere. Chefs use it. Restaurants use it.

15:18People who really care about flavor use it. Never tried it? Grab the bottle with the red cap next time you're at the store. Put it on just about anything. Then you'll understand. Q-P, the original Japanese mayonnaise.

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16:18PayPal Open, built for all business. Visit PayPalOpen.com to get started. That's PayPalOpen.com. The people that are opposing the ballroom are people that, in my opinion, are very disloyal to our country, very, very disloyal to our country. And I think we're doing very well. We're way ahead of schedule. And that's important because President Trump is racing to construct the 90 ,000 square foot ballroom with a 250 person crew working 20 hours a day, seven days a week, to keep the project ahead of schedule. Speed is essential because Trump is racing against the courts, and so far he's outrunning them.

17:05The project has moved ahead without any input from Congress or the public, and despite two courts ruling that Trump was flouting the law. And Chief Justice John Roberts has given Trump the go-ahead to outrun the Supreme Court as well. He can keep building his ballroom while the justices take more time to consider the issue. This isn't a new scenario for Trump. He's been acting first and then daring the courts to catch up with him since he took office for the second time. Joining me is James Fander, a professor at Northwestern Law School. James, does the chief justice's interim order tell us anything about how the full Supreme Court is going to look at this issue?

17:50I don't think we learned much from the order that the chief issued. It seems to me like just a request for some additional time suggesting that courts taking the issue seriously, but hasn't yet found its way to a resolution. So you've had two lower courts ruling that the ballroom project is probably illegal, but work was allowed to continue. I mean, why was work allowed to continue when they're saying that it's illegal? I think it was an attempt to accommodate the national security concerns that are associated with the proposed construction below ground. The government took the position, both in the district court and the appellate court, that the below ground construction was separable from the ballroom construction.

18:37and that the below ground construction had all sorts of security implications, bunkers and emergency medical care facilities and that sort of thing. Very difficult for a court to second guess those kinds of concerns, especially when the government is basically admitting, down below anyway, that the ballroom part of the project is separable from the below ground national security or security part of the project. So the government pitched the matter to the lower courts, I believe, as a situation where we can do this below ground thing without prejudice to the eventual construction of a ballroom above ground.

19:21And we can figure out what the legality of that is down the road. But in the meantime, we've already gotten this far with the national security below ground work. So let's continue with that. And I think that's why both courts agreed that the below ground work could continue thinking that they would retain some control over the ultimate shape of the above ground ballroom. Now the government's taking the position, of course, that the above ground ballroom is integral with the below ground security concerns that led to the continuation of the construction in the first place. I mean, what we had here was President Trump knocking down the East Wing before anybody could blink their eyes.

20:02I mean, it was there one day. It seemed like it was down the next day. Three days, yeah. So he took that action without any authorization, and it's done. So what do the courts do to catch up to him? You know, it's over. So in terms of restoring the East Wing, I think you're right that it is done. And the question is, now what is the proper response architecturally and historically to the scars that have been created in this place that belongs to the public and belongs to the government. It is within the control and stewardship of the Congress of the United States. And that's a question that is not easy to answer.

20:41There's no way to unring the bell or restore the East Wing. And I don't think anybody believes that what we should do is return to the best reconstruction or recreation of the East Wing we could find. I think the question is the legality of ongoing construction. And I think the lower course, at least, with some justification, view that ongoing construction project as unlawful because not lawfully approved by Congress, and therefore subject to limitation control, injunction, and so forth. And then the question is, once that injunction takes hold, what will be the shape of the project going forward if President Trump is required to secure the approvals and authorizations that he said he was going to get when he started making noise about the ballroom and never got, you know, because he decided he wanted to do it his own way without anyone else playing a part in the magnificent ballroom he was about to create.

21:38Isn't this sending a message that illegal behavior is being rewarded? You get to complete your ballroom, even though what you've done is illegal because you've gone this far already. This is a pattern and it happens in immigration cases. It happens in grant cases. It happens over and over again. When the courts finally get involved, it's too late. It's all over. No, it's true. And what I call the first mover advantage that the president enjoys as an executive or commander in chief means that he can take action and proceed on the assumption that it's lawful until somebody tells him otherwise. I think that's been his basic M.O.

22:20And in past presidencies, not in every case, obviously, but presidents showed a great deal more restraint in this shadow of uncertain law. I think this president prefers to move in the shadow of uncertain law. And even when there's no uncertainty at all, if he believes that either the Constitution or some other grant of authority allows him to take the action, then he will take it and turn the rest of it over to the lawyers. And we've seen it, as you say, time and again in the immigration space, the removal of aliens under the Alien Enemies Act. We've seen it with the dismantling of the USAID.

22:56We've seen it with the discharge of employees from positions in the executive branch without due process of law. If there were questions about the legality, there's a way to have a legal proceeding to determine whether a person properly holds an office. But instead, President Trump would rather fire now and litigate later. And that has been, I think, quite the pattern of his presidency. Well, it continues to work well for him. The Supreme Court seems to continue expanding presidential power. Is there any reason to think that it will limit him in this case with the White House ballroom? There, I think, is reason to think that the Supreme Court will be concerned about President Trump's violation of appropriations limitations that Congress has imposed upon him.

23:43I'm not sure that his role as the unitary executive under Article 2 will be understood to override appropriations restrictions. So that may be a place where the Supreme Court is a bit more protective of the traditional allocation of responsibilities as between the president and the Congress of the United States. And so I think there's some hope in this case, given the fact that there's a pretty strong case to be made, that Congress has previously appropriated money and understood itself to be the responsible party in making decisions about the shape of White House construction projects, there's some hope that the Supreme Court will understand the threat posed to congressional appropriation power by the actions of President Trump with respect to the White House.

24:27And perhaps that will have some radiating effect on other of the projects that he has in mind. There's a history, I think, of some minor alterations and improvements in the language of the relevant statute to the White House that are what you might call presidential vanity projects. You know, the installation by FDR of a swimming pool indoors, the use of that pool by JFK, the decision to close the pool by Richard Nixon and put, you know, a one lane bowling alley in the White House, and the decision by Gerald Ford to create an outdoor swimming pool. These are all relatively modest changes that don't really change the footprint of the White House or the appearance of it.

25:09Nothing to compare, obviously, to a$400 million ballroom project of the kind that's currently underway. And so it's hard for the current project to fit within that tradition of alterations and improvements that we've seen in the past. And for that reason, it may be that the Supreme Court pushes back a bit. Does it make a difference that Trump says that private donations are paying for the ballroom, although some reporting shows that public funds are covering more than half the cost. Yeah, that's a good question. And I was puzzled by that myself a bit because one of the claims being made here is that the National Park Service collects appropriated funds for use in connection with National Park Service projects.

25:54And so this relevant statute characterizes those donated funds as appropriated. And so the government has kind of cobbled together an argument that goes like this. Once the money has been collected and placed in the vault of the National Park Service, it's now appropriated funds. And the authorization to use appropriated funds that appears elsewhere in federal law can be stitched together with those donations and create the appearance that these funds have been, in fact, appropriated for the use that they have been put to. I think that's a very difficult argument to make in the end, given the jealousy with which the Congress of the United States guards its appropriation powers.

26:38And it's uncertain, I think, whether that kind of argument will be accepted by the Supreme Court. But that's the argument. You know, there's been nothing on this scale before in terms of donated funds put to the uses that they are being put to here. And it's at least very hard for me to see how this could be considered the kind of congressional control that we normally associate with the appropriations process. What would be the best outcome, the best case scenario for those who want to see supervision and independent oversight of the construction of the ballroom? So if you were concerned about construction of a ballroom and you wanted the best possible outcome you could get, then it seems a remand to the district court is going to be required.

27:30And that's going to require the district court to continue to oversee the project. I mean, one possibility is a hold on above ground construction. And that's all that's really on the table right now. put a hold on above ground construction while we conduct the necessary assessments and run through the necessary authorization and approval processes. That could all be handled as expeditiously as possible. I assume that President Trump might want to try to get all that done before the November election cycle, but it's obviously up to him to decide how he wants to secure that approval. And then once approvals have been granted, then the project could continue.