Utah Governor Spencer Cox Talks Meta Settlement

Utah Governor Spencer Cox discusses Meta’s settlement, arguing the amount should have been much higher, yet argues the more consequential result is the equitable relief requiring child accounts, age-gating, parental controls, algorithm changes, overnight restrictions and healthy pauses. Cox thinks Meta buried research showing significant harms to young users and says Utah will use the money to mitigate those harms, help struggling children, and create more opportunities for them in the real world. Cox spoke with Bloomberg's Joe Mathieu and Tyler Kendall.

See omnystudio.com/listener for privacy information.

Speaker 1: Bloomberg Audio Studios. Podcasts, radio, news.

Speaker 2: As we turn back to the big news out of

Speaker 2: Silicon Valley tonight, Meta reaching a huge settlement worth up

Speaker 2: to roughly $ 18 billion, including fees in a landmark case

Speaker 2: brought by states that accused the company of designing Facebook

Speaker 2: and Instagram to intentionally hook young users. The agreement requires

Speaker 2: Meta to make major changes to how its platforms operate

Speaker 2: for children and teens of We spoke to Utah Governor

Speaker 2: Spencer Cox about the settlement a short time ago. We

Speaker 2: want to start, of course, with this META settlement, which

Speaker 2: is a big deal for our audience. It's a big

Speaker 2: deal for parents and families and a big deal for investors, Governor.

Speaker 2: Up to $ 18 billion is the headline. We had to

Speaker 2: note META pulled revenue of more than $ 60 billion in

Speaker 2: the last quarter. And there's been a thought in some

Speaker 2: quarters today that this is a rounding error, essentially, for

Speaker 2: a massive company. Did META get off easy?

Speaker 3: Well, in some ways, yes. And in other ways, no. Look,

Speaker 3: I was one of the lone kind of dissenters when

Speaker 3: it came to the number. I thought the number should

Speaker 3: have been much, much higher. But what we got on

Speaker 3: the other end was something that we probably could not

Speaker 3: have gotten as much of in court.

Speaker 1: And that is the equitable relief.

Speaker 3: That is making sure that now they have to create

Speaker 3: these kids' accounts, that they put parents back in charge.

Speaker 3: that we're changing the algorithm, that we're turning these things,

Speaker 3: these platforms off at night, that we're having healthy pauses

Speaker 3: in there. These were all really important things that we've

Speaker 3: been pushing for. Utah was the first state to try

Speaker 3: to hold these companies accountable three, four years ago.

Speaker 1: And I'm really proud that we got that far.

Speaker 4: So, Governor, would you say this is more about the

Speaker 4: message that this sends more so than the money? And

Speaker 4: if you could drill in a little bit more on

Speaker 4: the money, how does Utah plan to allocate this? I

Speaker 4: know you mentioned one example there, but what else are

Speaker 4: you looking for? Yeah, yeah.

Speaker 3: So I want to say it's not not the message

Speaker 3: as much as we got actual changes to the platforms.

Speaker 1: And that that piece is really important. That piece matters.

Speaker 3: This is going to protect kids going forward. By the way,

Speaker 3: your kids should not be on these platforms at all.

Speaker 3: So so get them off. But if they are on,

Speaker 3: this is going to make them safer. We want to

Speaker 3: use the money to mitigate the harms that have been caused.

Speaker 1: Look, Meta knew. These guys, they knew what they were doing.

Speaker 3: They had their own research that showed that this was

Speaker 3: causing significant harm, increases in suicide ideation. increases in self-harm,

Speaker 3: anxiety and depression, especially with young women. And they buried

Speaker 3: that research and moved forward anyway. So we need to

Speaker 3: use this money to help, again, mitigate those harms, to

Speaker 3: help kids who are struggling. And it's not enough to

Speaker 3: just get off social media. It's what do we do next?

Speaker 3: We need to provide more opportunities for kids in the

Speaker 3: real world to get outside, to enjoy each other, to

Speaker 3: enjoy the real world again.

Speaker 1: And that's what we're going to use the money for.

Speaker 2: Well, as a father of a 19-year-old, I'm breathing fresh

Speaker 2: air just hearing you say that, Governor.

Speaker 1: So tell us how this works.

Speaker 2: These new guardrails are important. How do you enforce restrictions,

Speaker 2: for instance, on how much time kids can scroll when

Speaker 2: they're more clever than we are about getting around some

Speaker 2: of these parameters, parental controls, using other devices or other logins?

Speaker 2: I'm sure you thought this through.

Speaker 3: Yeah, look, there's no foolproof way to do this. We

Speaker 3: know that the kids are very smart, but this is

Speaker 3: huge because it requires the company for the first time

Speaker 3: to actually start age gating, right? So they have to

Speaker 3: know how old the person is. It puts parents in charge.

Speaker 3: The defaults now on these platforms are going to be

Speaker 3: to protect our kids, right? And now parents can override

Speaker 3: those if they want. If they want their kid on

Speaker 3: at three in the morning, the parent can change that

Speaker 3: and make it happen. I don't pretend that we're going

Speaker 3: to catch every single kid in this, but it raises

Speaker 3: the bar significantly.

Speaker 1: We're suing other platforms as well. In fact, there's a

Speaker 1: kicker in.

Speaker 3: This deal that significantly raises the monetary settlement. if other

Speaker 3: platforms join in. And so we're going after those platforms

Speaker 3: as well. And if we can get everybody moving this direction,

Speaker 3: it's just going to help lift everyone.

Speaker 1: It's going to help kids.

Speaker 3: It's going to help parents and make our country a

Speaker 3: better place.

Speaker 4: So that's actually what I was going to ask next, Governor,

Speaker 4: because Meta is calling on those other platforms, their peers,

Speaker 4: including TikTok and YouTube, to conform with this settlement, saying

Speaker 4: that it's not really going to work unless everybody gets

Speaker 4: on board. So what happens next? And does this really

Speaker 4: have teeth if those other platforms don't abide as well?

Speaker 3: Well, I mean, look, it certainly has teeth with Facebook

Speaker 3: and Instagram and the companies that are owned by Meta.

Speaker 3: Meta didn't settle this out of the goodness of their hearts.

Speaker 3: And this is what is frustrating. Like they could have

Speaker 3: done this three years ago. They could have done this

Speaker 3: 10 years ago. They could have not killed our kids

Speaker 3: in the beginning.

Speaker 1: That would be great. But they did. And so here

Speaker 1: we are.

Speaker 3: What this does is the reason they were settling is

Speaker 3: because they were losing badly.

Speaker 1: In these court cases. I mean, in New Mexico, they

Speaker 1: got rolled in a big way.

Speaker 3: I was actually excited for the case to move forward

Speaker 3: this fall in Utah, and they knew they were losing.

Speaker 3: There were four other cases that were just starting moving

Speaker 3: forward in Tennessee, California, other places. And they knew they

Speaker 3: were in trouble. They had the whistleblowers. The harms are

Speaker 3: so clear. And these other companies are feeling that, too.

Speaker 3: They know that the court cases weren't going well. They

Speaker 3: don't want to get on the stand and have to

Speaker 3: testify about how much harm.

Speaker 1: They've done to kids.

Speaker 3: So I think, I hope that this will be a

Speaker 3: driver to get everyone to the table. We passed bills

Speaker 3: requiring this kind of stuff years ago.

Speaker 1: They sued us.

Speaker 3: To prevent that from happening, we're still litigating those. The

Speaker 3: companies don't want this bad PR. And hopefully, you know,

Speaker 3: this will be a positive for Meta as people see

Speaker 3: that they can actually do something and that they actually

Speaker 3: care about kids instead of pretending to care about kids.

Speaker 2: Well, and they missed a lot of bad PR potentially

Speaker 2: in not having Mark Zuckerberg testify in this case based

Speaker 2: on this settlement. Governor, I'd like to ask you about

Speaker 2: the issue of data center because it ties into everything

Speaker 2: that we're talking about here eventually. And while you are

Speaker 2: out ahead when it comes to clamping down on sites

Speaker 2: like Facebook and Instagram, you are also ahead now. in

Speaker 2: the race to house data centers in your state. We

Speaker 2: talked about some of the projects last time you were

Speaker 2: with us, and you've brought forth a number of ideas

Speaker 2: about alternative energy to power them. Now that this has

Speaker 2: become such a visceral campaign issue, are you surprised to

Speaker 2: see this splitting both ways with Democrats and Republicans looking

Speaker 2: to control data centers? And are you looking for new

Speaker 2: rules of the road in Utah?

Speaker 1: Yeah, you're right. I mean, this has been fascinating.

Speaker 3: I mean, it's been a long time since we've seen

Speaker 3: kind of a backlash to something this big. I do

Speaker 3: think it goes back to social media in some ways. Look,

Speaker 3: data centers, there's a lot of misinformation about data centers.

Speaker 3: I'm pretty neutral on data centers, not a huge fan,

Speaker 3: but they are important.

Speaker 1: They're important to our modern world in very big ways.

Speaker 3: But I do think that they are the physical embodiment

Speaker 3: of people's concerns about big technology and AI.

Speaker 1: And look, I hope one of.

Speaker 3: The lessons that those AI companies out there are learning

Speaker 3: today is that they should think of kids on the

Speaker 3: front end. It shouldn't take us 10 years, 15 years

Speaker 3: to understand the harms and actually hold companies accountable. And

Speaker 3: that they'll make good decisions up front right now. When

Speaker 3: it comes to new rules for data center, yes. I mean,

Speaker 3: like everywhere else, I issued an executive order several months

Speaker 3: ago to put new restrictions around data centers.

Speaker 1: Utah has actually been really out in front of this.

Speaker 3: I know the nuance is kind of lost, but we

Speaker 3: passed some bills last session around water use and disclosing

Speaker 3: water use. Companies are using the best technology now, closed-loop systems,

Speaker 3: all of those things. You have to bring your own

Speaker 3: power in Utah. We were the first state to do that,

Speaker 3: so we're not raising rates for consumers. So but we

Speaker 3: are working on a new bill to try to put

Speaker 3: some more parameters around that.

Speaker 1: Interesting.

Speaker 2: You know, we talked to Senator Ted Cruz yesterday just

Speaker 2: quickly realizing that he's coming at this from a different

Speaker 2: state and a different body of government. He says hyperscalers

Speaker 2: ought to just start paying electric bills.

Speaker 1: Guess what?

Speaker 2: We want to put a data center in your community

Speaker 2: and you'll never have to pay an electric utility bill again.

Speaker 2: Is that the kind of thing that might work?

Speaker 3: Yeah, look, I've been very critical of the hyperscalers for

Speaker 3: not getting out in front of this. I mean, you know,

Speaker 3: these are some of the wealthiest companies in the history

Speaker 3: of the world with trillion dollar market caps who are

Speaker 3: trying to nickel and dime communities that that should not

Speaker 3: be happening. They absolutely should come in and let people know.

Speaker 3: the benefits that can come from this. Build new schools,

Speaker 3: lower people's taxes, lower people's electricity bills, and don't destroy

Speaker 3: the environment. All of those things are very possible, but

Speaker 3: they have to bear that responsibility. It's not up to

Speaker 3: the politicians to do that. I'm not here to defend them.

Speaker 3: People are right to be upset. People are angry. I

Speaker 3: totally get that. I think Senator Cruz is right. Communities

Speaker 3: should get to decide. There are going to be real

Speaker 3: winners and losers in this data center battle. And some

Speaker 3: communities who are interested in data centers coming and the

Speaker 3: data centers, the hyperscalers are willing to participate and give

Speaker 3: back to the community, they're going to really benefit from this.

Speaker 4: But in some ways, also, we have seen some of

Speaker 4: these hyperscalers work with governments, such as in Texas, for example.

Speaker 4: We saw a lot of the major players like Meta

Speaker 4: sign on to the governor, Abbott, his guardrails that he's

Speaker 4: ruled out there. Can you just give us any insight

Speaker 4: into what it looks like to work with these companies

Speaker 4: moving forward? And if you have plans to engage with them,

Speaker 4: particularly when it does come to this issue and the

Speaker 4: argument you're making that they have to bear.

Speaker 1: The brunt of this?

Speaker 3: Yeah.

Speaker 1: Yeah.

Speaker 3: Well, again, Texas put a moratorium and the governor of

Speaker 3: Texas put a moratorium on on any data center building.

Speaker 1: And so, again, a red.

Speaker 3: State you've seen you've seen blue states doing the same thing.

Speaker 3: And we just haven't seen that type of a response

Speaker 3: to a technology in some time. And look, those are

Speaker 3: similar conversations. I've been very blunt with everybody I've been

Speaker 3: able to talk to in this space to tell them like, hey, guys,

Speaker 3: you're just not going to be able to build anywhere

Speaker 3: unless you stop being a little less selfish and actually

Speaker 3: go out and help people understand that there is a benefit.

Speaker 3: And if there's not a benefit, then it's just not

Speaker 3: going to happen.