Meta’s $17bn settlement: The end of social media as we know it?

0:00This episode of the Times Tech podcast is sponsored by KPMG. Katie, we've been tracking the AI surge for a while, but some of the latest data is pretty striking.

0:10Danny: It is. KPMG's latest quarterly AI pulse suggests that 7 in 10 UK business leaders still see AI as a top investment priority, even if the economy slows down in the next year. But turning that investment into tangible value is another question. And so a lot of organizations are still figuring out how to move from endless AI pilots to something that works across the business. KPMG's focus is on that gap, helping organizations scale from the pilot phase to AI-powered transformation they can trust. To find out more about how KPMG can help your organization make the difference, you can visit kpmg.co.uk forward slash AI.

0:51This episode of the Times Tech Podcast is sponsored by IBM.

0:55Danny: Wimbledon is one of those rare events that feels steeped in tradition, but behind the scenes, it's also a huge data operation. Millions of fans follow the tournament across time zones, devices and platforms, and increasingly they want highlights, stats and personalised updates in real time. IBM has worked with Wimbledon for more than 30 years, using data and AI to help create digital experiences for fans, including Match Chat, which can answer questions during play, and likelihood to win, which uses live match data to offer near real-time predictions. It's a useful example of AI being applied in a way people can actually see and understand.

1:34Danny: To learn more about how IBM helps create smarter business, visit ibm.com slash Wimbledon. I just want to start by going. That's my breaking news klaxon. Hold on, hold on. which we don't have oh my god are you okay is there an air raid no i'm not actually my phone is lighting up and my heart rate on my aura ring is spiraling we don't have an emergency podcast but if we did it might sound like that what happened what happened as we started recording as you've woken up in silicon valley we've had the news that meta has agreed to settle this mega mega a mega court case that it was that it's been facing in california against 50 states in the us and it's agreed up to pay up to 17 billion dollars but more than that it's got to make mega changes to its apps i was not prepared for so many megas i'm just trying to emphasize just how important this is it's mega it's mega and it's fascinating and we're going to go through all of that in the podcast today.

2:49Danny: So wake up. Get your coffee. Get your coffee. Should we get to it? Let's get to it. Hello and welcome to the Times Tech Podcast where we unpack how technology is reshaping our everyday lives. I'm Danny Fortson out here in Silicon Valley. And I'm Katie Prescott here in the city of London and we've decided to do something a little bit different with the podcast. So from this week, you're going to get not one, but two episodes from us. Correct. So our Friday episode will focus on the big tech stories of the week and why they matter. And then on Sunday, you can hear our big interview, a longer conversation with founder or CEO, thinker shaping what is happening and what happens next.

3:29Danny: So it'll be the big stories, the big themes on Friday, and then the big conversation on Sunday. Two quite different flavors. So our big story last week was this trial that Meta is involved with in California against 50 states in the US relating to child safety. And we got the news a short while ago that it's now settled with those states. It's got to pay up to 17 billion dollars. But I think that number really isn't the big news here. What's happening, it's going to have to make enormous changes to how kids and teens use these apps. So it's going to make parental restrictions tighter. It's going to mean they can't use them overnight for certain periods of time.

4:13Danny: There are going to be time limits during the day as well. And it feels like really this brings the US up to speed in terms of limiting social media with what's been going on over here in Europe. Yeah. And I think we shouldn't sail past the number because 17 billion is a bigger penalty than Meta has ever paid for anything. And as we know. Or any social media platform, we should say. And Meta has been wrapped over the knuckles numerous times over the years for violating certain rules, regulations, laws, etc. So that$17 billion from them is, you know, it's not the$200 billion that was being talked about a week ago.

4:52But, you know, it's real money, right?

4:56Danny: Definitely real money. And California, where you are, I'm just looking at the statement here from the Attorney General. California is going to receive up to$2.1 billion of the settlement. But we should say that Meta is not going to have to pay out$17 billion all in one go. It's going to be structured over a number of years. And I think what's really fascinating about this is it also wraps in the behavior of other social media platforms. So if we go back to the beginning, Meta went to trial with these states, but other platforms had already settled. This case was brought by four states, but clearly in the background while the lawyers were arguing in the courtroom, there were negotiations going on between all 50 states because there's, you know, all of these states are in this in some shape or form.

5:49The four states who were actually in the courtroom and Metta. So now they have the settlement. There are more cases coming still. So this isn't the end of the story for Metta. It's the end of part of the story. And Meta has been putting out all these very confident kind of emails at the end of every day of court being like, oh, this happened today. And this is how this witness was undermined and blah, blah, blah, blah. And this is all the great stuff that we proved and et cetera, et cetera. And it was like putting on a very brave face. But clearly, they made the decision that, you know, it's not worth the risk.

6:25just in the last quarter the company has spent two billion dollars defending all these various cases there are thousands of them so i think they made the kind of the the decision to kind

6:38Danny: of settle here but this is not the end of the story i mean we should say that in settling meta has denied wrongdoing i think it's worth looking at some of the detail of the settlement because it seems to me it pulls in the other social media platforms too. So when you look at the restrictions that they're going to introduce, it says at the start, there'll be a default daily time limit of two hours for users under 18 that can only be lifted by a parent. And then it goes on, if other social media platforms agree to similar terms, the time limit will drop to an hour. Similarly, a default nighttime block between midnight and six for users under 18.

7:18Danny: But if other social media platforms agree to similar terms, the nighttime block will expand to cover 10 to 7. So there are obviously conversations going on, as you said, with the likes of YouTube and TikTok to see if they can coalesce around this agreement. It's a big shift. It's like putting seatbelts in cars or getting rid of tobacco advertising around schools. You know, if they can kind of coalesce, as you say, and force the hand of the entire industry to make fundamental changes to how their products work that is a big deal no well there is more than a whiff i think of the big tobacco settlements in this document if you look at where the money's going from this fine it says a significant portion received by california you know we decided by the legislative blah blah but it's earmarked for purposes related to the prevention or remediation of mental health or other harms to young californians associated with social media use right which is also you of reminiscent of the opioid court cases as well and of course we should say meta completely denies that there's anything remotely to do with them between you know any relation between them tobacco opioids etc and they're like we've taken dozens of steps to you know make these things more safe etc etc etc but clearly they're just facing an avalanche of lawsuits and they made a decision in the second week of a five to six week trial.

8:43You know, just yesterday, Adam Masseri, the head of Instagram, took the stand for the first time. There was expectation that Mark Zuckerberg was going to have to testify again. And again, they just decided, nope, we're going to make a different decision. But, you know, more to come for sure.

8:58Danny: As we always find with these lawsuits, so much comes out during a trial that it does feel like it's in the company's interest sometimes just to make sure it doesn't happen. And the fact that the share price has bounced, I think, is indicative that investors are pretty pleased that this has, you know, as you said, not gone away completely, but knocked an enormous suit on the head. My daughter is starting secondary school next Thursday. And here in the UK, when you got to 11 and you started secondary school in year seven, it used to be a bit of a rite of passage that you get a smartphone. I gather from older friends.

9:35Danny: She's my oldest. So we're just going through this for the first time. And it's very noticeable that in her cohort, the mood amongst parents is really, really shifting. And I was driving some kids to a match the other day who had older siblings. And they were whinging about how their 13-year-old siblings had smartphones and their parents weren't letting them have them. So it does feel like, you know, I mean, it's just a sort of my little observation of what's going on. But it does feel that this is all starting to have some sort of social impact. And it's interesting, again, looking at some of the detail in this settlement.

10:10Danny: There's a ban on cosmetic procedure image filters for users under 18. So those things that, you know, you can make yourself look a certain way and getting rid of them for under 18s is a big deal. You know, because not too long ago, Instagram made teen accounts private by default instead of just being completely open. And you're kind of like, why did it take you more than a decade to do that? And there's a nod to the addictive side of it as well. So there's a ban on displaying numbers of likes or reactions to users under 18. So you mean the online popularity contest aspect of it all? Yeah, gone.

10:47Danny: An option for users under 18 to have a non-personalized feed. So they're not targeted by certain algorithms. It's pretty tight, right? Well, we'll see. we'll see the proof of the pudding is in the eating like we'll see actually how it shows up because this is the thing that if you talk to arturo bejar for example who i have who is the star witness for the state's whistleblower he was like yeah there are dozens of ways that instagram has kind of put in new tools to make these things more safe but his argument which meta denies is that they are put in there as a fig leaf they are so hard to use so hard to find They are designed to kind of be difficult to implement.

11:29So it's like, yeah, you have all of these safety features, but nobody uses them because they're not user friendly. They're hard to find. They're obfuscated or whatever it may be. So it'll be interesting to see how tight the enforcement goes.

11:43Danny: And on that, if you're wondering how they're going to police it. So Meta, I'm checking their own homework a bit. Meta will bring on an independent auditor with expansive access to information and resources. regularly reporting and the right to communicate concerns to the attorneys general. And finally, Meta will be subject to an injunction prohibiting it from making further false, misleading, deceptive statements around safety features. It is fascinating for me as well to see the US coming up to the same standards that have been introduced in Europe, especially politically. And in China for years.

12:17Danny: And in China for years. China is, TikTok, which is obviously a Chinese company, was a Chinese company in the US. had completely different rules around its use in China and what could be shown to kids than in the West. But anyway, I think we've had the online safety bill here in the UK, similar in Europe. So that's really been driven by governments. And for a while, the US government under Trump was saying, hey, Europe, you know, stop penalizing our social media companies. Stop putting all of these restrictions around US tech. And now it feels like actually that change has happened just in a different way, just through a legal process.

12:56Well, we should move on to my favorite topic, which I know you're excited about, humanoid robots. Stay with us and we'll be right back.

13:09This episode of the Times Tech Podcast is sponsored by KPMG.

13:13Danny: We often talk about the shiny object problem with AI, where things look impressive in isolation, but are much harder to roll out across a large organization. Issues like governance, workforce readiness and trust tend to become more important as things scale. KPMG's approach is to look beyond AI as just another technology rollout and instead how it could redesign work across the organization and fit into wider processes and decision making. So it's less about individual use cases and more about how organizations can transform and deliver outcomes powered by AI. To find out more about how it can help your organization make the difference, you can visit kpmg.co.uk slash AI.

13:59Danny: Today's episode of the Times Tech Podcast is sponsored by IBM. Wimbledon may look timeless, grass courts, white kits, strawberries and cream, but the way people follow sport has changed. Fans now expect fast updates, highlights and useful stats wherever they are. IBM works with Wimbledon to help turn live match data into digital experiences, including match chat and the likelihood to win. It's AI in action in a setting everyone understands. To find out more, visit ibm.com slash Wimbledon.

14:35Katie, it's your favorite time. It's tea time.

14:43It's robot time.

14:46Danny: You're just happy to have the kids back to school. I'm so happy. So, yes, if you haven't noticed, which, you know, is unlikely, the past week or so in China, they've had the World Humanoid Games. We've had 650 teams, more than 2000 robots from 16 countries, basically competing in like effectively track and field for humanoid robots. And I don't know about your social media feed, but like mine has been full of both terrifying feats and also hilarious bloopers. i guess my i'm less you know maybe into robots than you but absolutely i think what really has struck me is just how prolific these robots are how many things they can do it it's like a proper olympics i don't know what's your favorite thing been to watch i quite enjoyed the tug of war that was quite tug of war was hilarious so the kind of unintentional comedy quotient was extremely high yeah very very high there was one where they had like a an obstacle course where they had to like walk over uneven services walk over things they had to army crawl under some netting they had to like climb up on a box and get down and like one of them the robot climbs up on this box which is maybe i don't know four or five feet tall and then he gets right to the edge where it has to kind of jump down it's almost like obviously these are bots they're these are droids so it's not like thinking per se but it's like all right well i guess i'm just gonna do this and then it just like falls like a tree like and like lands face first and then just just lays there like it's failed and then others there's robot cheerleaders and some of them yeah they lose their balance and then they start kind of completely like wigging out because they can't get back up and then so you you have like these like you know five or six or eight robot cheerleaders doing their thing and then there's one over here who's like having a serious problem i think that was my favorite thing about watching the robot games was all the sort of accoutrements that they had to have to protect everybody from the robots so there's enormous crash mats there's big kind of big crash mats that they ran into and then those men who were standing at the sidelines with hoses to put out the fires when these robots crashed fell apart and burst into flame they were just yes and then on top of that you had all the commentators as well as if it was proper sport just there kind of getting very excited as well as i mean i spotted at least two bbc journalists i think we sent someone there from the times as well it is it's got a lot of attention it was absolutely but you know what the thing that is most striking about we've been covering humanoid robots for a while they've got so much better it is extraordinary and and then also i think you know jokes aside although i'll give you one more my absolute chef's kiss favorite moment is there's a robot he's doing this like coming upstairs going downstairs going on these ramps trying to like navigate this obstacle course and to the left is a group of robot cheerleaders shaking their money makers okay and there's a commentary online of like this robot who's going through the obstacle cores and he almost seems to get distracted by the cheerleaders takes a wrong step and then just falls out of frame just like falls off and everybody's like don't you got to keep your head in the game it's just like just as he's going past all the cheerleaders he's like watch this ladies or whatever and then it's a step up from robot wars isn't it do you have robot wars in the US.

18:33Danny: Yeah, exactly. I should say, obviously, it's kind of great content, but it's really marketing. And it shows like, China, in terms of humanoids, you know, you have Elon Musk talking about Optimus, his humanoid robot, he's like, this is going to be bigger than Tesla, bigger than SpaceX, it's going to be the biggest thing ever, ever, ever, ever. And he's talking about building millions, of course, he's way, way behind that. As far as we can tell, he's so far shipped hundreds, China, on the other hand, is effectively out shipping the West like 30 to 1 in terms of humanoids actually building them. And again, we're still talking like thousands, tens of thousands.

19:13But the scale, as usual with China, is dramatically higher. There are hundreds of billions in state money being funneled into this. They're building these things for at least 20 % cheaper than anything you can find in America. and when you step back and think about like an aging population the future of work whether it's a humanoid or something else they're building a huge new industry and this is just like a kind of almost like a snapshot of where they're getting to while in america we're pretty far i mean or in the west i should say we're i mean miles behind and the question is is like should we care but again when you think about warfare when you think about labor this could get quite significant and as you say they're getting better very very quickly and the ceo of unitary which just went public massive ipo he reckons as he would that we're approaching a chat gpt moment for so they're the chinese humanoid robot yes yeah one of the many yes and i would say he's not the first to

20:21Danny: make that point it does feel to me that this has been building a head of steam for at least a year now just in terms of how much more humanoid robots have stepped out of the shadows of being something quite absurd and amusing into something that's really potentially useful and a sign of that for me has been the amount of reports i get from the big banks in the city of london that are about humanoid robots and their potential. So, you know, the banks churn out reports about new trends and that sort of thing. And all of the big ones now have said, they're getting a lot cheaper to build, they are getting a hell of a lot better, they're getting more useful.

21:01Danny: And this is now a thing. We are getting a step closer, as you say, to that chat GPT moment, the time that actually we can start to see some utility. And it's not just, let's try and build a robot that can stand on its own two feet and walk which i think i even wrote a column about two years ago used to be quite a difficult thing to do for sure but fear not katie there's a way for you to make money out of all this me yeah you me anyone yeah yeah there's a company out here called figure they've raised a ton of money it's run by this guy called brett brett adcock who before this started a flying car company they recently came out with this thing called index which is if you sign up figure will send you like this headset which you wear it's almost like a visor and it has a camera and then you're supposed to wear it while you're doing your duties around the house like cleaning doing the dishes sweeping mopping and basically it is recording all of this data of how you do this stuff hold the phone that's amazing and then what it's sucking that up and putting it in its robots yeah and they say they'll pay you by the minute we are committed How much spending$1 billion over the next 12 months to kind of build up this index of like human kind of cleaning activity.

22:25Danny: It's actually quite a good idea, you know, because like your salaries are well big over there. So I bet I could do quite well out of this. I don't know what the per minute rate is. I'm going to look it up. But anyway, fascinating. It really is. And you've been talking about it for a while. I used to laugh at you and now look see I'm like Steve Jobs yeah they laugh at you until they whatever the one you know whatever it is like Steve Jobs just like Steve thank you for recognizing me I feel seen anyway before we go as usual it's very annoying I don't know why our friend of the pod Jensen Wong does this but they always report on a Wednesday after we record we should tell him to move that well i'll text him i'm sure he'll change it yes no problem so nvidia little chip company hashtag biggest company in the world or what actually maybe it's behind apple now anyway they're reporting uh their financial results after we record it when the market closes today lots and lots of questions because it feels like every three to five days they fund a new one of their new customers another ai company yes and be like here's a billion dollars what are you going spend it on oh on our chips cool but it's also a bellwether isn't it really for absolutely how much demand there is for ai and it's just been what they call a beat and raise stock so every three months puts out its results it beats what yes everyone else was expecting and then raises the expectations for the next three months and for this ai moment when it has become the kind of the four times a year that they do this it's the thing that everybody uses as a benchmark for is the party going to still go?

24:10Are we starting to see cracks? Whatever. So we can kind of circle back on that next week once those numbers come out. But I think it was really interesting, you know, in the midst of all of this is like OpenAI, which is one of their biggest customers, just this past week, released their own chip called Jalapeno. And apparently it is like really fast and very good. And according to Semi Analysis, who are like these big, very well-respected research firm out here, they're like, it's better than NVIDIA's Blackwell. And they used ChatGPT to help design it. So that feels like it could be a thing.

24:49Danny: Oh, and that has been the thing that everybody's watching for is can another company, and there are so many other businesses that are trying to do this, can another company make a chip that is as good and as popular as NVIDIA's to steal its AI crown? I mean, you mentioned, you know, their relationship. NVIDIA has also put money into OpenAI, obviously. But it's just not every day that you see like your biggest customer building a direct competitor product. I mean, it's not the first time it's happened, but it's really interesting. And we should say that it's built something, they're using it, but, you know, it's not scaled up.

25:26Danny: That's a 27, 28 type story in terms of it getting, you know, them really pumping these out. but I just think it's really interesting how quickly they were working on this for a couple years which in chip land is very fast from a standing start and they use AI to help design it which again kind of goes to that whole point of recursive self-improvement and these these systems starting to help you do things you couldn't otherwise do well maybe one of the analysts will ask Jensen about it and the um cool I'm sure they will interesting to hear what he to say about that. Listen, I'm going to let you go back to just putting your feet up and enjoying some quiet time.

26:06Danny: I've got to go. We've got all this back to school stuff this morning. I thought that's what you didn't have to do. I thought like now things had stopped. No, I know. You could just enjoy being Danny. No. No.

26:21Danny: Fly my pretties! I do enjoy being me. I love me, so thank you. I'm quite excited about next week. Yes, yes, yes. But we will return to some of the stuff next week. But thank you all for listening. I think that's it for this week's episode of the Time's Tech Podcast. And we'll be back on Sunday with an episode of the interview. This week, we're speaking to the co-founder and CEO of Irregular. So they're a cybersecurity company who've worked with the likes of Anthropic, Meta to stress test their AI models before the tech is publicly released. Thank you so much for listening. And if you don't already, please do subscribe so you don't miss the episode.

27:03See you.

27:04Danny: Bye.

27:08Danny: This episode of the Times Tech Podcast was sponsored by KPMG. One of the themes we keep coming back to is the gap between AI ambition and real world application. And that's where KPMG is focusing its work, helping organizations move beyond pilots and think about how AI can change the way the business operates and how it fits into wider processes and decision making. You can find all their insights and how they can help your organization make the difference through successful AI workforce adoption. Visit kpmg.co.uk slash AI. This episode of the Times Tech podcast is sponsored by health and life insurer Vitality, your health's best friend.

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