Meta Settles With Trump for $25 Million

Summary

Podcast Summary: The Journal – "Meta Settles With Trump for $25 Million"

Episode Details:

• Title: Meta Settles With Trump for $25 Million
• Release Date: January 30, 2025
• Hosts: Kate Linebaugh and Ryan Knutson, with Jessica Mendoza
• Produced By: The Wall Street Journal & Gimlet, in collaboration with Spotify

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1. Introduction to the Settlement

The episode opens with Kate Linebaugh setting the stage for a significant development in the ongoing legal tussle between Meta Platforms Inc. (formerly Facebook) and former President Donald Trump. Weeks after Trump secured the election, Meta CEO Mark Zuckerberg initiated a conciliatory approach by visiting Trump at Mar-a-Lago, Florida.

Key Quote:

"Weeks after Donald Trump won the election, Mark Zuckerberg, CEO of Meta, flew to Florida to have dinner with the President Elect."
— Kate Linebaugh (00:05)

2. Meta's Strategic Outreach to Trump

Rebecca Ballhouse elaborates on the context of Zuckerberg's visit, highlighting Meta's strategic efforts to mend fences with Trump amidst a tumultuous post-election period characterized by publicized meetings at Mar-a-Lago.

Key Quote:

"That's our colleague Rebecca Ballhouse. She says the dinner was part of efforts by Meta to court Trump."
— Kate Linebaugh (00:33)

During the dinner, despite prior tensions—where Trump had previously criticized Zuckerberg on social media—the meeting proceeded amicably until Trump broached the unresolved lawsuit from 2021, signaling the importance of settling before any future collaboration.

Key Quote:

"I think it went remarkably well given that just a couple months earlier, Trump had been tweeting about how Zuckerberg should maybe go to prison... This is something we need to resolve before this friendship that you're seeking can really move forward."
— Rebecca Ballhouse (00:40)

3. Background of the Lawsuit

The roots of the lawsuit trace back to the events surrounding the January 6th Capitol attack. In response to Trump's use of social media to rally supporters, Meta and other platforms like YouTube and Twitter suspended his accounts. Trump perceived these actions as censorship, leading him to file lawsuits against these companies in July 2021.

Key Quote:

"He is essentially accusing Meta and these other social media platforms of censoring him... He's saying, you're silencing me or depriving me of my right to free speech."
— Rebecca Ballhouse (05:22)

Legal experts initially dismissed these lawsuits as frivolous, viewing them as a tactic to divert Trump's attention from ongoing investigations and impeachments.

4. Settlement Negotiations and Agreement

In the fall of 2023, Meta and Trump's legal team reconvened negotiations at Mar-a-Lago. Despite Trump's intermittent presence during the mediation—balancing his time between legal obligations—both parties worked towards a resolution.

The settlement culminated in Meta agreeing to pay $25 million:

• $22 Million allocated to Trump's presidential library fund.
• $3 Million designated for legal fees.

Key Quote:

"And yesterday, the result of the talks between Meta and Trump came out a $25 million settlement. Of that money, $22 million, will go to a fund for Trump's presidential library."
— Kate Linebaugh (13:10)

5. Reactions and Implications

The settlement has sparked controversy among lawmakers and Trump's critics, who argue that the payment serves as a bribe, setting a dangerous precedent for future lawsuits against media and tech companies.

Key Quote:

"Democrats on the Hill and Trump's critics are saying, you know, that this is essentially a bribe... Senator Warren said it looks like a bribe and a signal to every company that corruption is the name of the game."
— Kate Linebaugh (13:56)

Meta has remained relatively silent on the settlement, aside from acknowledging it and highlighting their efforts to rebuild government relations. Mark Zuckerberg, during Meta's earnings call, emphasized the company's commitment to improving ties with the current administration.

Key Quote:

"Mark Zuckerberg... talked about trying to reset government relations."
— Rebecca Ballhouse (14:20)

6. Broader Impact on Tech and Media Relations with Trump

Rebecca Ballhouse discusses the broader implications of the settlement for the relationship between big tech/media companies and Trump. The move by Meta, along with similar settlements like ABC News contributing $15 million to Trump's foundation, indicates a strategic shift towards appeasing Trump to ensure favorable relations with the administration.

Key Quote:

"I think it's clear that these are not accidents. This is a deliberate approach that Trump's lawyers are taking... they feel like there's going to be more opportunity here."
— Rebecca Ballhouse (11:41)

Experts warn that such settlements could embolden Trump and his legal team to pursue more claims against media and tech giants, potentially leading to increased litigation and strained relationships in the future.

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Conclusion

The settlement between Meta and Donald Trump marks a pivotal moment in the interplay between technology companies and political figures. As Meta invests substantially to mend its relationship with Trump and, by extension, the current administration, the episode sheds light on the strategic maneuvers companies undertake to navigate the complex landscape of politics, law, and public perception.

Key Quote:

"I think they must have felt like we can't let this lawsuit ruin it all."
— Rebecca Ballhouse (15:01)

This development not only affects the involved parties but also sets a precedent for how powerful tech and media companies may handle future conflicts with political entities.

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Additional Reporting: Annie Linsky

Note: Advertisements and non-content sections from the transcript have been excluded to maintain focus on the episode's primary discussions.

Transcript

[Kate Linebaugh]

Weeks after Donald Trump won the election, Mark Zuckerberg, CEO of Meta, flew to Florida to have dinner with the President Elect.

[Rebecca Ballhouse]

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.

[Kate Linebaugh]

That's our colleague Rebecca Ballhouse. She says the dinner was part of efforts by Meta to court Trump.

[Rebecca Ballhouse]

So they're sitting on this patio and it's a pretty small group. And, you know, by all accounts, the dinner went well. I 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 meta in 2021. And the signal that sending is, this is something we need to resolve before this friendship that you're seeking can really move forward.

[Kate Linebaugh]

And 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?

[Rebecca Ballhouse]

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.

[Kate Linebaugh]

Welcome to the Journal, our show about money, business, and power. I'm Kate LINEBAUGH. It's Thursday, January 30th. Coming up on the show, Meta's $25 million settlement with President Trump.

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[Kate Linebaugh]

The 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.

[Unnamed Reporter]

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.

[Kate Linebaugh]

The reason the companies gave for the suspensions was that Trump had used his accounts to rally his supporters.

[Rebecca Ballhouse]

Zuckerberg at the time said that the risks of Trump using the social media platforms during that period were simply too great. But 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 6, and they felt that Trump was continuing to contribute to fanning those flames.

[Kate Linebaugh]

In 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.

[Rebecca Ballhouse]

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.

[Kate Linebaugh]

And those lawsuits were filed in July 2021. What was the basis of his suit against Meta?

[Rebecca Ballhouse]

He is essentially accusing Mehta 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.

[Kate Linebaugh]

Of First Amendment case, right?

[Rebecca Ballhouse]

You're depriving me of my right to free speech.

[Kate Linebaugh]

What was the legal strategy behind this suit?

[Rebecca Ballhouse]

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. We 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.

[Kate Linebaugh]

And did that strategy go beyond these cases? Like, were there other lawsuits that his legal team brought?

[Rebecca Ballhouse]

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 and Schuster for publishing tapes of interviews with him. Just recently, he sued the Iowa pollster who predicted that Iowa would go blue in the election. So he's long been a very prolific filer of lawsuits.

[Kate Linebaugh]

All right, so getting back to this meta case at the time, how did the company respond to the lawsuit?

[Rebecca Ballhouse]

They pushed back. They. 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.

[Kate Linebaugh]

Trump appealed that dismissal, but it had repercussions for his other lawsuits.

[Rebecca Ballhouse]

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. These 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.

[Kate Linebaugh]

How does the judge respond?

[Rebecca Ballhouse]

So the judge is 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 vigorous 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. So, 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.

[Kate Linebaugh]

But then Trump won the election, and the meta lawsuit came back into play. That's after the break.

[Unnamed Reporter]

Foreign.

[E]

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[Kate Linebaugh]

When 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.

[Rebecca Ballhouse]

There were a number of policy issues that were top of mind for Meta executives at the time.

[Kate Linebaugh]

Like what?

[Rebecca Ballhouse]

I can't say which of these issues were specifically discussed, but there's a lot of things that Meda cares about right now that the administration is doing. There's the TikTok ban. You know, whether TikTok is ultimately banned in the US will have enormous ratifications for Meta and its very similar product on Instagram. They're facing a number of antitrust cases, and I think overall, they are hoping that the disposition of this administration will be more tech friendly than what they viewed. The Biden administration, 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.

[Kate Linebaugh]

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.

[Unnamed Reporter]

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.

[Rebecca Ballhouse]

The case is so 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 gonna sort of encourage that and could possibly have alarming consequences.

[Kate Linebaugh]

Do you know whether that settlement impacted the Meta situation?

[Rebecca Ballhouse]

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. And we found actually a letter that they filed in Another case, the Lawson, 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.

[Kate Linebaugh]

Then on January 10th, Zuckerberg went to Mar A Lago to hash out an agreement with Trump's team.

[Rebecca Ballhouse]

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, but 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.

[Kate Linebaugh]

And then yesterday, the result of the talks between Meta and Trump came out a $25 million settlement. Of 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 Meta hadn't settled it?

[Rebecca Ballhouse]

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.

[Kate Linebaugh]

How has the news of this settlement been received by lawmakers and Trump's critics?

[Rebecca Ballhouse]

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. Senator Warren said it looks like a bribe and a signal to every company that corruption is the name of the game.

[Kate Linebaugh]

Has the White House responded to that?

[Rebecca Ballhouse]

The White House has not.

[Kate Linebaugh]

And what has Meta said about the settlement?

[Rebecca Ballhouse]

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.

[Unnamed Reporter]

This is also going to be a big year for redefining our relationship with governments. You know, we now have a US Administration that is proud of our leading companies, prioritizes American technology winning.

[Kate Linebaugh]

And so what have your sources told you about what this settlement says in terms of Mehta's relationship with the administration?

[Rebecca Ballhouse]

Well, 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. And I think they must have felt like we can't let this lawsuit ruin it all.

[Kate Linebaugh]

What does this say about the relationship between big tech and media companies with Trump?

[Rebecca Ballhouse]

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.

[Kate Linebaugh]

And between this and the ABC settlement, do you think there'll be more?

[Rebecca Ballhouse]

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.

[Kate Linebaugh]

That's all for today. Thursday, January 30 the Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode by Annie Linsky. Thanks for listening. See you tomorrow.