Big Tech to Pay Billions for Hooking Kids on Facebook, Instagram

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0:58Welcome to The Beat. I'm Ari Melber. Our top story really is about two different dynamics colliding tonight, and I'm about to explain. We have the mounting midterm revolt against MAGA incumbents. We've heard a lot about that. We also have a new victory against some of their tech allies. Those big tech billionaires who've been cultivating those famously controversial and close relationships with Trump actually have been seeking a lot in return. Now, there's the usual 1 % benefits that Republicans offer, like tax cuts, deregulation. There's also, though, helping tech and AI companies deal with this growing public revolt.

1:32The main funders of data centers in the AI boom are big tech companies that won earlier digital pushes, including social media founders like Mark Zuckerberg. So even as the nation turns against the way many big tech companies have been pushing their addictive products or dangerous misleading content on basically the public to turn a profit, as that goes on, we have big news tonight. A kind of David versus Goliath story where David just won. Critics of Facebook's company, Meta, winning billions against it and new reforms, which shows if nothing else that fighting still can work, even in these tilted times.

2:10And Facebook may have feared facing a jury of American citizens, which could be as angry at them as American voters. This new victory comes amid a growing anti-tech backlash against Trump, with AI greed becoming the focus of concerns about inequality, about these data centers, about the lack of AI guardrails and more. Now, we know Trump's approval has been cratering, and this election has felt already like a revolt against his perceived second-term failures, the high prices, the Iran war. And that's certainly continuing, but there are mounting signs that another layer is the revolt about holding big tech accountable because Trump clearly won't.

2:47And that may be motivating voters as data center protests mount, and it's motivating critics using the accountability of our legal system. So that's the big context for the top story tonight. The road to big news long in the making, a major loss for this Trump White House visitor and, of course, Facebook Meta founder, Mark Zuckerberg. Meta agreed to settle claims that the company's social media platforms harmed children. The states accused the company of misleading customers about the safety of its products intentionally getting children addicted to them. The basic accusation is that the platforms were designed in a very specific way to keep children hooked on them.

3:27Meta will pay up to$16.68 billion to states as part of the deal. They've also agreed to make a number of significant changes to their platforms for users 13 to 17. This is seismic. It's going to be something of a dinner gong for both states and plaintiff attorneys. Real penalties, real billions and real changes. $17 billion, if you're counting, and court supervisor changes to the products over these concerns that it endangered children with the way it pushed knowingly addictive social media. Now, this effort has drawn interest in public reporting and criticism of Facebook, which has really been building for years.

4:07Big tech treated more like a tobacco company nowadays. The Beat actually was doing special reports on Facebook in 2017, exploring how their greed and ambition had begun to hurt and mislead users, even undermine campaigns and democracy. Today's breakthrough reflects this shift. You know, tech in America, Silicon Valley, it was once seen as kind of a new school industry, bringing us iPods and phones and fun. Well, the industry's approval has dropped since 2015 over 50 points. And that may be part of why the company backed down in a dramatic capitulation today, as the Times put it, bowing to a rare movement in a polarized nation, because this has been a bipartisan team of 47 states, red and blue, uniting to use their state court powers to fight this admittedly powerful employer and company.

5:02Now, by now, today's win might sound logical in this climate. But even when these suits first started in 2023, experts said, well, the states were using a kind of a novel legal theory against the tech defense that had been, Bloomberg reports, impenetrable in courtrooms for decades. And that's just in court to say nothing of the money and the ties to the Trump White House, which has been intervening to help other allied corporations in federal cases. This goes back to something we've been reporting on. On this kind of case, Trump is powerless to stop the states. Zuckerberg knew that. It's a reminder that our Constitution's federalism matters, with governors from states red and blue exercising state powers.

5:46Trump can't just hold a meeting and interfere with that. And he certainly can't pardon any other types of prosecutions at the state level. This is where the federalism matters. And some see the legal win as an inflection point in the battles over tech and inequality. Again, we know this. Juries are made up of citizens, just like the electorate is made up of citizens. And while this company sometimes operates like it has few limits and invokes its power, its wealth, its money, its connections to Trump. But now, with the prospect of facing this actual jury of Americans, maybe they saw the risk of losing, having to pay even more.

6:23Which is interesting because think about it. In at least that one point, Zuckerberg or his team might be reading these shifting political wins against tech companies better than Trump himself, who just reiterated his support for these experimental data centers again in a new interview amid these protests. So yes, Zuckerberg has courted Trump, even added a MAGA ally to his powerful board on the company. That's a big deal. That's kind of a big position, not just like hiring a lobbyist. But Zuckerberg and these companies also have corporate plans that go well past the political calendar of 2029. And this billionaire has shown an ability to shift before.

7:04He already went from a wunderkind dropout entrepreneur to the AI titan we know today with several movie portrayals to show for it. I will get it under control. I will call someone and see what the next move is. But this is going to be news now. I'm a free speech absolutist. I'm not the one who's lying and I'm not stopping them from seeing someone who is. I hope that we will get to a point with AI where you can write verifiably secure code. AI for everything, right? There are also potential good uses for AI. We've reported on that too, and there's a lot of discussion about that these days. But the rush spending spree from these companies is not about just getting you better cancer research tomorrow.

7:48It's clearly about tying what have become their sagging brands to a new pitch to make money. zuckerberg's company spending over 130 billion on ai in one year and that kind of figure jumps to 750 billion when you add in all the other tech companies who are basically racing each other on this it's spending that shows how much money they have and to go back to the midterms in their home state of california there is a proposed billionaire tax on the midterm ballot that could hit tech moguls really hard. Some have already fled the state while also funding a campaign to try to take down that new law if it were to pass.

8:28The clashes are playing out while most Americans face inflation that's wiped out their wages, their wage gains. The AI boom increasingly presented by the leaders from Trump to these tech titans, not as a policy to be debated or considered, let alone slowly tested, but as a kind of inevitable future that you just must accept. even if it decimates jobs or destabilizes communities, even as AI's own leaders have said in public, by the way, there's a risk this could end humanity itself. So if we slow down, we look at that pitch with a product that also currently loses money and has a bubble risk to the rest of the economy and a jobs risk that so many people are living through and the existential risk that they admit, voters are not just saying no thanks to rushing AI and data centers as soon as possible, many are channeling the kind of breakdown moment that Mugatu has in Zoolander, when he kind of stops the scene, different context, but says, enough already.

9:30Isn't anybody noticing this? I feel like I'm taking crazy pills. Well, if you are part of this movement trying to slow this down or make sure it's accountable, questioning these tech billionaires or the rush to AI, that doesn't make you crazy at all. You're not alone either. The revolt against both AI and this wider inequality is big and growing. It is shaping the midterms, as the Times put it recently. Voters saying hell no to data centers, according to a Republican pollster. And it's all over the campaign ads.

10:17Big Tech wants to use secret deals to force data centers into our towns. Meet data center David Crowley. There's an opportunity for us to really become AI and a data hub, not only for the entire country, but for the entire globe. And he wants you to pay for it. I stood up to my own party and voted against giving your tax dollars to data centers.

10:40We've heard so much about the Tea Party and other groups, but the next movement could be this very backlash. It's all the more notable that it seems organic. It doesn't even have a single partisan villain to just rile up one side in the pattern we've seen. Obama veteran and our longtime beat guest, Jay Comanduri, notes there's unhappiness with the last great tech innovation, the smartphones and social media apps on them. A movement to ban or limit them still is bipartisan like the AI backlash. Fifteen years ago, the push was to be on these devices by every sector, he notes. education, business, media, and the epidemic of cyberbullying.

11:15When that popped up, he notes the argument was never for kids to get off devices, but be careful with them. He writes, now with AI, there's a sense that we shouldn't repeat the mistake we made with social media. Quickly adopt it without thinking through the implications. So let's do that now. The aforementioned Obama veteran, Che Comanduri, is my special guest. Your thoughts on both that settlement and how it fits with this wider revolt. Yeah, I think this is a very complex phenomenon. We're seeing this very real tech backlash. And it's very different than, say, like the Tea Party backlash of 15 years ago, where there was an actual funder, the Koch brothers, and there was an actual reason for the racial backlash, which was the election of the first African-American president.

12:03Both of those things were inciting elements, and both of those things came together and created that movement. This is very different. This is genuinely grassroots. This has come from the bottom up. This is the American people saying enough is enough. And why are they doing this? I would say that there are two reasons. One is a growing sense of unhappiness with Donald Trump and the tech billionaire buddies around him. The other is a general unhappiness with the state of American society in the age of social media and smartphones.

13:01Mm-hmm. enlightened public kind of mood of, wait, we're not going to wait 10 years and be on the back end of fighting AI. Yeah. I mean, we have seen what social media has done to our kids. We have seen the increased rates of depression, the increased rates in some cases of teen suicide, all as a result of social media becoming much more prevalent in the life of American children. And we've seen what it has done to American society, the divisions, the partisanship, the polarization we've seen, all of that, I would argue, comes out of social media. I mean, think about it this way. Social media came of age in the Great Recession when income inequality in America was soaring.

13:41Donald Trump emerged and said, the reason you're unhappy, the reason that income inequality exists in this country, the reason those factories are closing, the reason you're falling behind is because of immigrants. It's because of undocumented people coming across the borders, the Mexicans, the Muslim Americans, the brown menace. Antifa out in Oregon. He was able to point the fingers and say it's all the result of people who are not like yourself. They are the ones who are doing this to you. And he was able to do this entirely because of social media. You know, the political scientist Henry Farrell says social media doesn't just inform the misinform the public.

14:18It malforms the public. It makes it doesn't give you the wrong information. It changes your perception of society, the people around you and what other people are thinking. And Trump was able to use these tools to manipulate the American society to blame other people. Now it's been 15 years. Trump's gotten everything he's wanted. What's the result? All of the issues that we had 15 years ago, they're still with us and they're much worse. Yeah, I mean, you put it very clearly. And while today you have this this big victory, which I think also, as I reported, suggests the fact that they didn't want to go further.

14:52They want to face a jury. They know what's up out here in terms of how people are feeling. and you talk about the distortions, that goes to sort of, what did we get for this? You know, the old saying is, if you're not paying for the product, you're the product. It's not free. Your data, maybe what your kids are up to online, how to market to them, that's the product. And people have, I think, wised up to that a little while we're still very much a phone society and a social media addicted society. And Trump, you mentioned, it may sound quaint now because we've moved on, but at the time, X was known as Twitter and he would post these things and they would ride the rage bait and then they would ride the news cycles.

15:34And people, I think, would rightly question some in the media of saying, well, so he tweeted it. So, you know, you post it, but you won't you won't even cover a somber presidential address by then President Obama. But this guy just rants online. I mean, it sort of was, of course, a preview of the many ways that he broke people's brains. What do you see in these midterm ads and the revolt? Well, I think that what Americans are feeling is that they simply do not trust Trump and the tech billionaires with artificial intelligence and AI. They don't understand what the policy is. They don't understand what the plan is.

16:07And they're right to be alarmed and they're right to be worried. This is potentially a very dangerous technology for individual privacy, for national security. And we're not seeing any plan, any proposal, any guardrails in place to make sure that this benefits the American people and American society in general. I think that's a tremendous revolt. I also think, you know, MAGA can't say they're unhappy with Trump, but they can say they're unhappy with AI. There's a permission structure to basically say, hey, you know, I don't like this technology. I don't like this AI data center. They don't want to say, I don't like Donald Trump and the fact he's cozying up to all these guys and creating these data centers.

16:48But it does create a permission structure for people in MAGA, in the Republican Party, to say that they're unhappy with the way things are going, which is why you're seeing in all these red states the same movement that you're seeing in blue states. Really interesting. We thought of you for this and quoted you, Che. Thank you very much. Coming up, we turn to Hegseth's problems with identity politics at the Pentagon. on. But next, talking midterms, we go into one of the key battleground districts in 90 seconds. Exterior Remodels, Inner Monologues. Brought to you by Power. The house looks good. Like, really good.

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18:45We're 69 days out from the midterms. We've been hosting candidates here across all of MSNOW, of course, and on this program. Recently, we had on several Democrats. We heard from one Democrat trying to flip a key Michigan battleground that came down to one point in 2024, where incumbent Republican Congressman Tom Barrett defending his seat. And he joins me now, a Congressman, U.S. Army veteran running for re-election in that Michigan district against Democrat William Lawrence. Thanks for being here. Yeah, thanks so much for having me. I really appreciate it. It was a close race, which is why there's extra attention on the district, as you know better than most.

19:22So let's start with what you think your voters chose last time, whether that was for you or Trump, and what they're getting so far. What are you running on in terms of what this Congress maybe has achieved? Sure. Well, I won my race by about three and a half points two years ago. So certainly nothing we take for granted, but I think it was reflective of the work that I put into my district and the campaign that I ran. And I ran on a set of principles that I think were important. I ultimately ran for Congress because I felt like families like mine weren't having our voices heard in Washington, D.C.

19:55And I wanted to do something about that. And after 22 years in the Army, stepped up and ran for Congress. I want to continue that fight. I want to continue that mission. I know we've still got problems to fix and challenges to face in our country. And I'm, you know, willing to go back to Washington and continue working on those. I know affordability is still top of mind for many voters, certainly a huge issue that I'm concerned with. But, you know, it's one that we have to go out and confront with real policies and real solutions that are going to fix that. Voted to, you know, really clamped down on some of the housing manipulation that's been done by these large hedge fund homebuyers that go in and manipulate the housing market that way.

20:33Also around health care. The other big issue of affordability is one of health care. I introduced legislation that would require our health insurance companies to actually pay more out in medical claims for the premiums that they take in. They call it the medical loss ratio. I introduced legislation to increase that. Also reforms to health insurance broadly so that Americans can use tax-exempt health savings accounts to really buy a full complement of things that will affect their overall health, whether that's healthy groceries, gym memberships, fitness devices, a whole host of different things to really rethink how we deliver health care.

21:08And those are the solutions that I'm bringing to the table, as well as a host of other things. People can go on my website for Congress, barrett.house.gov slash reform and see a whole host of things that are outside the box solutions that I've proposed for a variety of things from trust in government to health care affordability to housing, endless wars, and a whole host of other things that I'm happy to talk about more than what this segment would allow. Sure. You mentioned endless wars. We mentioned your service to the country as a veteran. You have that perspective, and you're one of the only handful of Republicans that did vote to rein in president's war powers.

21:45When you look at that now, do you think we should stay in Iran much longer? and what do you say to voters in your district who might who might say, OK, that was a step and most Republicans didn't do it. But how do you actually bring the troops home and affect the gas price? Well, you know, I think my vote was one that was reflective of my principles. It was certainly born out of my experience in the army. My 22 year career in the army was exactly surrounding the 20 year long war on terror. One of the most devastating statistics that I think that came out of that was while we lost 7 ,000 men and women to combat action on the battlefield, we actually had 30 ,000 more that died to suicide in that war on terror generation after they returned back home.

22:30That's something that is so devastating to me. I serve on the Veteran Affairs Committee. I see the total human effects of war every single day on that committee, something that I am very, very reluctant to see us engage in. I certainly don't want to see Iran and develop a nuclear weapon. But I also believe that we have to be very measured about how we go about decisions for use of force in war. And paramount among that is that only Congress has the authority to commit our men and women to combat action into war. Certainly the president is the commander in chief that carries that out. That decision doesn't rest with the president, it rests with Congress.

23:04My vote was reflective of that, and it will continue to reflect that as we go forward in this conflict or any other that may arise. Understood. So, look, someone watching from your district of Michigan or any of our viewers might say, sounds like a reasonable guy, right? One of the harder questions for you, apart from those issues, was in the news earlier tonight. We were talking about all this data center stuff and big tech and Wall Street. And here's some headlines, only right to give you a chance to respond to this. When the House Republicans passed that big bill, The president likes to call it, as we know, a big, beautiful bill, whatever you want to call it.

23:40It gave a lot of tax breaks to a lot of the richest companies and people in our country. It also included, as you know, Factory Data Center Boost, basically a package that helps them. And so I guess the question is, how should people understand that? Do you think that some of these big companies and people in the upper brackets should be getting even more help from the government? And do you think the federal government's role right now should be in sort of juicing or encouraging more data centers, whether that's in Michigan or wherever the feds are helping grease the financial wheels? Well, there's certainly a lot in that question, but I can say foremost among that is I believe that the decision on data centers has to be respected and guarded for local control, for local decision making.

24:22I introduced legislation just last week that would make sure that any federal agency is prohibited from overriding or acting in a way with federal resources or through a federal agency from overriding or reducing any amount of local control on the issue of data centers. I think that has to rest with the local communities. Look, when we passed the working families tax cut last summer, we expanded a whole bunch of tax savings for everyday ordinary Americans, doubling the standard deduction, expanding the child tax credit. No taxes on tips, no taxes on overtime, no taxes on Social Security. In fact, a family of four in America today will pay no federal income taxes if they make$73 ,000 in income or less.

25:04and I'll let you finish with our time, but just to be clear, sir, but it's also the case, is it also the case that it's fair to say, supporting that Trump plan, you're supporting money to subsidize those data centers, yeah? No, I don't think that's fair. The top 1 % of income earners in the country are actually going to be paying a higher share of the overall federal taxes that are in our country that we collect through the federal treasury. while we were giving tax relief to the Americans that are working the hardest, whether they're working overtime wages, whether they're working for tips, you know, in the service industry, whether they're raising a family through an expanded child tax credit.

25:43All of those were deeply important to me to make sure that we delivered on those priorities for Americans. I want to see us bring gas prices down. A lot of that has been an acute effect of the conflict in Iran, which we already discussed earlier today. I want to see our economy take up and I want to see families foremost among the decisions that are made in our country. And that's where I'm going to go back to Washington and continue to work on every day that I'm given the opportunity by the folks that I represent. Yeah, well, look, we appreciate you coming and facing the questions. That's something both you and your opponent were willing to do.

26:13But as you know, it's not something every candidate will do. So Congressman Barrett, Republican of Michigan, thanks for making the time tonight. Yeah, thank you for having me on. I really appreciate it. Absolutely. And we'll be watching the race. Let me tell folks what's coming up. We look at the power of protests, including beat viewers weighing in. I'm going to show you what some of you told us by the end of the hour. That connects to music and my parents. That's the tease. We'll tell you the rest later. But next we turn to the competence question. Todd Blanch at DOJ. Pete Hegseth at the Pentagon.