Meta (META.US), TikTok spend money to "keep quiet": the first case of a school district lawsuit against social media addiction settles, social media giants collectively pay $27 million.

Several of the world's largest social media platforms have agreed to pay approximately $27 million to settle a lawsuit brought by a rural school district in Kentucky. The district accuses these companies' products of being addictive and contributing to a mental health crisis among young people, thus draining the school's resources. According to documents released under the state's open records law, Meta (META.US), which owns Instagram and Facebook, will pay $9 million to the district, the highest amount among the companies. Records show that Snap Inc. and TikTok each agreed to pay $8 million. YouTube, owned by Alphabet Inc. Class C, negotiated a payment slightly over $2 million and is the only company to also agree to provide a training program to help teachers better use their video products in the classroom. This one-time payment total exceeds the annual budget of Breckinridge County School District by 8%. The settlement agreements were announced earlier this month, but financial details were not disclosed at that time. The agreements allow these companies to avoid the first trial in the U.S. targeting school districts' accusations, which was scheduled to take place on June 12th in a federal court in Oakland, California. However, their respite will be short-lived as over 1,300 more districts have filed similar lawsuits, currently awaiting trial. The next trial is scheduled for February 2027. The agreement reached with Breckinridge County School may indicate that these companies are willing to reach large-scale settlements with other districts. According to estimates, this series of lawsuits could ultimately hold these companies liable for up to $400 billion in legal responsibility. In written statements, these companies have stated that they have amicably resolved this lawsuit and will continue to invest in providing stronger safety measures for users. The terms of settlement for these companies were disclosed for the first time under Kentucky's open records law, shedding light on the potential costs of this massive lawsuit that has been brewing for years across multiple jurisdictions. Over the past four years, individuals, school districts, and state attorneys general have filed over 6,000 lawsuits against these social media giants, accusing them of developing products that are as addictive as cigarettes and targeting minors like major tobacco companies. The lawsuits claim that the features of social media platforms have distorted a generation of children, leading to addiction, depression, anxiety, eating disorders, and suicide. In the first personal injury case to go to trial, a jury in a Los Angeles state court ruled in March that Meta and YouTube were responsible for harming a 20-year-old woman who claimed her addiction led to severe mental anguish. The jury awarded her $6 million in damages - a negligible sum for two companies worth tens of trillions of dollars. However, for the thousands of other young people waiting to face these companies in court, it is a symbolic victory. (Snap and TikTok, also named in the case, reached confidential settlements before the trial.) In another separate trial held in the same month, a jury in New Mexico ordered Meta to pay $375 million in damages for failing to protect children from online harm. The Breckinridge County case is seen as a bellwether trial for school districts' addiction claims against social media. What surprised many of the plaintiff's lawyers involved in the lawsuit was that all companies agreed to settle the case before trial, in part because Breckinridge County was chosen by the defendants to be the first to go to trial. The companies argue that Breckinridge County - a micro district nestled in the foothills of the Appalachian Mountains - represents other rural districts with fewer than 2,000 students, which account for nearly half of the school lawsuits filed in the U.S. While personal injury lawsuits filed by individual users or their parents seek compensation for individual losses, the districts seek compensation for institutional costs - including providing greatly increased mental health and counseling services for students. The districts argue that these companies were aware of the mental health risks to young people but failed to design features to reduce the addictive nature of their products. Breckinridge County School District sought over $60 million to fund mental health programs related to student overuse of social media and to develop curriculum plans around the dangers of the digital world. In testimony, the district superintendent Philip Watts estimated that he spent about 20% of his work time dealing with concerns related to social media. Caroline McDaniel, who served as principal of Breckinridge County High School from 2016 to 2019, estimated that social media consumed much of her time. "It's a huge waste of resources," she said in an interview. "I had two assistant principals who spent at least 50% of their time on social media-related matters." "Kids would sneak phones into the classroom, film fights during classes, damage property, and cyberbully each other," McDaniel added. "I remember even then, our counselors were really struggling." McDaniel currently works at a high school in Tennessee, where she says the social media problem is only getting worse. The next federal bellwether trial - this time chosen by the plaintiffs - revolves around a district in Tucson, Arizona. Meanwhile, Kentucky is one of approximately three states (out of about 36) suing Meta for social media harms, with the trial set to take place in August in Oakland. The state's attorney general told the judge in charge of the case that the state is seeking $40 billion in civil penalties.