Op-Ed: Meta’s $5 Billion Deal with the State AGs to Take Down its Rivals

[This op-ed was by the San Jose Mercury News on Sept. 18, 2026.]

Created by ChatGPT Sept. 2026

Meta’s settlement with the state attorneys general has been touted as industry-redefining. Indeed, Meta desperately hopes it will be. Although Meta was the only industry player to negotiate its terms, the settlement agreement is structured to broadly reshape the social media industry. In addition to Meta’s guaranteed settlement payments of $12 billion, Meta will pay the state AGs a total of $5 billion in additional bonuses — if the state AGs restrict minors’ usage of Meta’s key competitors (and make comparable settlement payments).

The settlement’s quid-pro-quo effectively places a bounty on the heads of Meta’s competitors — and deputizes the state AGs as Meta’s bounty-hunters. Meta wants the government to hit Meta’s rivals. If state AGs deliver the results Meta wants, Meta pays them off. The quid-pro-quo is not subtle. It’s out in the open for everyone to see, but that doesn’t make it any less corrupt or corrosive.

It’s easy to understand why Meta dangled the bounty in front of the state AGs. For years, Meta has urged governments to increase their regulation of social media—but only so long as any new regulation doesn’t disadvantage Meta more than its rivals. By unilaterally entering into the settlement agreement, Meta has exposed itself to a risk that it ends up as the only major industry player hindered by the agreement’s restrictions.

This would put Meta in a precarious market position, especially given the settlement agreement’s time limits on use and the fact that Meta’s competitors are just a click away for consumers. The economic benefits of having its competitors equally restricted are surely worth far more than $5 billion to Meta. That’s why Meta will happily share a piece of its financial upside with the state AGs if they deliver their end of the bargain.

While it’s clearly in Meta’s interests to pay off the state AGs to impose the settlement terms on Meta’s rivals, why are state AGs so eager to become Meta’s bounty-hunters?

To be fair, the state AGs have plenty of motivation to prosecute Meta’s social media rivals without any additional bounties from Meta. Indeed, prior to the settlement, several state AGs had already initiated enforcement actions against some of Meta’s rivals. The state AGs might view the $5 billion bounty as a financial windfall for doing work they were willing to do for free.

Unfortunately, any windfall from Meta’s bounty arrangement comes at a high cost to the state AGs and their constituents.

First, the quid-pro-quo taints all further social media-related state AG enforcement efforts against Meta’s rivals. Going forward, judges, juries and Meta’s rivals will justifiably wonder: Are the state AGs bringing the enforcement action because they genuinely believe their constituents are being harmed, or because they hope to cash in Meta’s bounty?

Second, the state AGs have shown how justice is for sale in their offices. The state AGs will do the anticompetitive work of controlling the marketplace activities of a company’s rival — if enough money is on the table. Putting a price on justice this way degrades the rule of law.

In promoting the settlement, the state AGs have proudly claimed that they are working to protect the children in their states. Instead, Meta’s bounty demonstrates that the state AGs are actually working for Meta. This is a good reason for the courts to think carefully about whether the settlement should be approved.

Our society needs to have difficult and high-stakes conversations about how we can improve children’s welfare online. By selling out the integrity of their enforcement decisions, the state AGs have discredited themselves as contributors to those conversations.

Eric Goldman is a law professor and associate dean for research at Santa Clara University School of Law. He has been teaching and researching internet law for over 30 years.

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