Meta Settles With Trump for $25 Million

0:05Weeks after Donald Trump won the election, Mark Zuckerberg, CEO of Meta, flew to Florida to have dinner with the president-elect. They're sitting on the patio at Mar-a-Lago. So, you know, other diners can see them. That was a big theme of that whole, you know, post-election, pre-inauguration period was that guests at Mar-a-Lago were just sort of seeing who the president was meeting with on any given night. That's our colleague Rebecca Ballhaus. She says the dinner was part of efforts by Metta to court Trump. So they're sitting on this patio and it's a pretty small group. And, you know, by all accounts, the dinner went well.

0:47I think it went remarkably well, given that just a couple months earlier, Trump had been tweeting about how Zuckerberg should maybe go to prison. But at the end of the dinner, Trump brings up this issue of the lawsuit that he had filed against Metta in 2021. And the signal that he's sending is this is something we need to resolve before this friendship that you're seeking can really move forward.

1:15And yesterday, they came to a resolution. Meta, which owns Facebook and Instagram, agreed to pay$25 million to settle the lawsuit. What stands out to you about this settlement? I think just the fact that Zuckerberg is settling a case from four years ago that when Trump first filed these lawsuits, they were described by legal experts as pretty frivolous, that he's now settling it, let alone for$25 million, is pretty remarkable. I think it shows just how far Zuckerberg and likely some of these other CEOs are willing to go to make inroads with this administration and with Trump.

2:03Welcome to The Journal, our show about money, business, and power. I'm Kate Leinbaugh. It's Thursday, January 30th.

2:16Coming up on the show, Meta's$25 million settlement with President Trump.

2:36The roots of the Trump lawsuit against Meta go back to the January 6th Capitol attack. In the days after, tech companies took action against Trump. YouTube is the latest media platform to block President Trump. Twitter permanently shut down his personal account, breaking off his connection to nearly 90 million followers. Former President Donald Trump will remain suspended on Facebook and Instagram. That decision coming this morning from Facebook's oversight board. The reason the companies gave for the suspensions was that Trump had used his accounts to rally his supporters. Zuckerberg at the time said that the risks of Trump using the social media platforms during that period were simply too great.

3:23But the idea was just that, you know, they were trying to sort of quiet things down and ease these tensions that had flared on January 6th. and they felt that Trump was continuing to contribute to fanning those flames.

3:42In the months after Trump left the White House, pressure on him mounted. He was being investigated by prosecutors in New York, D.C., and Georgia. He's, you know, in a very low point by all accounts. His political future is very uncertain, and he's, you know, raging about, he's gone through this second impeachment, he's facing all these new investigations, including into his role on January 6th, he's extremely frustrated. And so he files these three lawsuits against Facebook, YouTube, and Twitter for suspending his accounts after the January 6th riots. And those lawsuits were filed in July 2021.

4:24What was the basis of his suit against Metta. He is essentially accusing Metta and these other social media platforms of censoring him. And he actually has a couple of other plaintiffs sign on to these lawsuits. And these are people who have also had their accounts suspended or their posts, you know, have content warnings added or things like that. So the gist of it is that he's saying, you're silencing me. A sort of First Amendment case. Right. You're depriving me of my right to free speech. What was the legal strategy behind this suit? The way it's been described to us is that really this was a way to sort of give Trump something to focus on that would be more on the offensive.

5:11We spoke to one of his lawyers who told him that we have to find a way to change your posture, to put you on the attack. And in some ways, it sounds like these lawsuits were a way to kind of cheer Trump up and give him something to focus on that wasn't just all these investigations into his behavior as president. And did that strategy go beyond these cases? Like, were there other lawsuits that his legal team brought? So at the time, I think it was just those three. But certainly in the years since then, he's filed a number of lawsuits. He sued Bob Woodward and Simon & Schuster for publishing tapes of interviews with him.

5:53Just recently, he sued the Iowa pollster who predicted that Iowa would go blue in the election. So, you know, he's long been a very prolific filer of lawsuits.

6:07All right. So getting back to this meta case, at the time, how did the company respond to the lawsuit? They pushed back. They sought to have it dismissed. And in 2022, they have a bit of a win because the parallel lawsuit that Trump had filed against Twitter gets dismissed by a judge. Trump appealed that dismissal, but it had repercussions for his other lawsuits. What happens next is sort of a domino effect where a federal judge then stays the Facebook case pending the outcome of Trump's appeal of the Twitter case. And a similar thing happens with his lawsuit against YouTube, too. So at that point, it kind of looks like there's not going to be too much activity here.

6:58These lawsuits could really peter out. But in the fall of 2023, Trump's lawyers try and revive the meta lawsuit, and they ask the judge to lift the stay in the case and say that new evidence has come to light and they'd like to file a second amended complaint.

7:20How does the judge respond? So the judge definitely appears skeptical of their arguments. And, you know, their arguments are that there has been this chilling effect on Trump and on the other plaintiffs from Facebook's alleged censorship of the president and suspension of his account. The way his lawyer describes it in that conference is that once you're restored, you have to watch your step. You're sort of whistling in the dark every time you use Facebook. And the judge seems pretty skeptical of that account. He describes Trump as as vigorous as a person as could possibly exist and says the idea that he would be afraid of his shadow or experiencing any kind of chilling effect sort of strains the imagination.

8:04So, you know, he says they can consider pursuing a second complaint if they want to, but he indicates that he is skeptical of the overall argument. — But then Trump won the election, and the meta-lawsuit came back into play. That's after the break.

8:43When Zuckerberg and his team from Meadow went down to Mar-a-Lago last November, they had a long list of policy issues to talk about with Trump. There were a number of policy issues that were top of mind for Meta executives at the time. Like what? I can't say which of these issues were specifically discussed, but there's a lot of things that Meta cares about right now that the administration is doing. There's the TikTok ban. You know, whether TikTok is ultimately banned in the U.S. will have enormous ratifications for Meta and its very similar product on Instagram. They're facing a number of antitrust cases.

9:21And I think overall, they're hoping that the disposition of this administration will be more tech-friendly than what they viewed the Biden administration as being. They really had a hard time with the Biden White House. And so I think they really wanted to sort of reset relationships with the government. A few weeks after that dinner, there was some big news in a separate case Trump had brought against a media company. ABC News will now contribute$15 million to President-elect Trump's library and foundation. This will settle a lawsuit Trump filed against the network and anchor George Stephanopoulos.

10:00So ABC last year settled this defamation lawsuit that Trump had brought against the network for$15 million. And that number and the fact that they settled, I think, really stuns legal experts who worry about the precedent that this sets. For, you know, Trump loves to say he'll sue media companies. He sometimes follows through. And I think legal experts say that having this precedent of he can get$15 million out of a lawsuit is only going to sort of encourage that and could possibly have alarming consequences. Do you know whether that settlement impacted the Metta situation? No, I don't know. And what's also pretty interesting is that Trump's lawyers seem to have taken a lesson from the ABC settlement.

10:52And we found actually a letter that they filed in another case, the lawsuit that Trump had filed against Bob Woodward and his publisher, where his lawyers attached a copy of the ABC settlement and essentially said, you should think about following ABC's lead. So it's clear that these are not accidents. This is a deliberate approach that Trump's lawyers are taking in this moment where they feel like there's going to be more opportunity here. Then on January 10th, Zuckerberg went to Mar-a-Lago to hash out an agreement with Trump's team. And it's this pretty wild scene that was described to us where he's sitting there for a full day of mediation with Trump's lawyers.

11:38But Trump is sort of in and out of the room. We know that he leaves at some point to go get sentenced in the Hush Money case in New York, which he appears for virtually. He also comes back into the room at some point in full golf attire and a hat and says that he's just played a round of golf. So, you know, I don't think it's a stretch to say that Trump is likely enjoying this dynamic of, we know he's loving having all these CEOs come down to Mar-a-Lago to meet with him after sort of shunning him for many years. And then yesterday, the result of the talks between Metta and Trump came out. A$25 million settlement.

12:19Of that money,$22 million will go to a fund for Trump's presidential library. The remainder is for legal fees and the other plaintiffs. Would this case have gone to court if Mehta hadn't settled it? Well, I mean, it's hard to say. It's hardly like this case was on the brink of going to court when they settled it. There had really been nothing happening since that fall meeting with the judge. How has the news of this settlement been received by lawmakers and Trump's critics? Democrats on the Hill and Trump's critics are saying, you know, that this is essentially a bribe, that this is a settlement they didn't need to pay and that they're paying to get in with Trump.

13:07Senator Warren said it looks like a bribe and a signal to every company that corruption is the name of the game. Has the White House responded to that? The White House has not. And what has Meta said about the settlement? Meta has said nothing so far. They confirmed the reporting. Mark Zuckerberg in the earnings call that Meta had on Wednesday talked about trying to reset government relations. This is also going to be a big year for redefining our relationship with governments. We now have a U.S. administration that is proud of our leading companies, prioritizes American technology winning. And so what have your sources told you about what this settlement says in terms of Metta's relationship with the administration?

14:01Well, I think if you go back to what a source told us was the message Trump was conveying, which is that if we're going to have this friendship going forward, if you want to be brought into the tent, we need to resolve this matter. I think it's hard to imagine that Meta didn't feel like we've gone to all this effort to try and rebuild relationships here. how can we now let this lawsuit get in the way of all the work that we've put into this they had donated to the inauguration they threw this party for the inauguration they've made these trips down to mar-a-lago you know zuckerberg had even hired someone back in 2021 to try and improve his relationships with republicans overall so this has been a years-long effort to try and reset relationships here.

14:54And I think they must have felt like we can't let this lawsuit ruin it all.

15:01What does this say about the relationship between big tech and media companies with Trump? I think that both of those industries feel like they have some ground to make up, I would say. Certainly it's not helpful to be in an active litigation with the current administration. I think for tech, you know, Zuckerberg has long been a target of Trump's and they have a very complicated history. So there's a long saga there of the two or at least Trump targeting Zuckerberg that I think he's eager to sort of wipe away as much of that back history as possible. — And between this and the ABC settlement, do you think there'll be more?

15:54— Well, we know that Paramount executives have discussed settling a lawsuit that Trump brought against CBS over an interview that they had with former Vice President Kamala Harris. I think it's fair to say that this is unlikely to be the last, or we certainly know that the Trump lawyers are probably going to go after more settlements in any case they can.

16:24That's all for today, Thursday, January 30th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Annie Linsky.

16:38Thanks for listening. See you tomorrow.