Why Out-of-Court Settlements With Big Tech Will Not Fix Safety, Security, & Privacy Challenges
- TWH
- 9 minutes ago
- 5 min read
Over the past few months, several major technology companies, including OpenAI, Google, (1) and this week Snapchat (2), have resolved civil lawsuits through out-of-court settlements. These cases alleged that platform design, features, or engagement systems contributed to serious mental health harms, including suicide.
For some observers, these settlements are being celebrated as accountability. A sign that pressure is finally working and that change is underway.
At The White Hatter, we urge caution on such celebration. Not because accountability does not matter, but because not all accountability produces change, especially when it comes to business models built around engagement, data extraction, and behavioural influence.
Out-of-court settlements serve a very specific legal function. They resolve individual claims without creating legal precedent, without judicial findings of fault, and almost always without any admission of liability, and this distinction is critical.
Settlement agreements routinely include language stating that the company does not concede that its product caused harm or that its design choices were unsafe. From a legal standpoint, this allows the company to close the case without accepting responsibility for the underlying allegations. In most instances, these agreements are confidential, impose no enforceable design obligations, and require no changes to core product architecture.
For companies operating at massive scale, even significant payouts may be financially immaterial relative to annual revenue. While meaningful to families who launch these civil actions, they are often treated internally as predictable litigation risk rather than as a signal that the business model itself must change.
Unless a settlement includes injunctive relief, ongoing oversight, or enforceable safety commitments, it rarely alters how products are designed going forward.
Safety by design is not about adding optional tools or warning labels after harm occurs. It is about embedding risk reduction into the architecture of a product from the outset, and most private settlements do not accomplish this.
They do not require platforms to redesign engagement loops that maximize time on device. They do not mandate changes to recommender systems, such as AI chatbots, that amplify emotionally charged or harmful content. They do not impose limits on notification mechanics, re-engagement prompts, or data-driven nudges that prioritize attention over well-being. Without enforceable obligations, safety features remain peripheral rather than foundational.
To be clear, settlements can sometimes influence behaviour, particularly when they include public terms, monitoring, or reporting requirements. However, the majority of privately negotiated resolutions do not impose the kind of structural accountability required to change a company’s incentive system.
From a legal strategy perspective, companies often settle not because they believe the claims lack merit, but because trials carry risks that extend far beyond a single case.
A litigated case creates discovery, and discovery exposes internal documents, research, risk assessments, and internal communications. A trial produces a public factual record where discovery material can be tested in a court of law specific to its validity. Judicial rulings address questions of duty, defect, foreseeability, and causation, and those outcomes can be reused by future plaintiffs.
Even more importantly, published rulings that survive appeal can shape how courts interpret a company’s obligations moving forward.
Settlements allow companies to avoid this cascade. They resolve claims without creating reusable legal findings, without inviting appellate review, and without establishing a roadmap for future litigation.
Cases involving youth mental health and suicide present real evidentiary challenges. Harm in these cases is often multifactorial, involving social, psychological, familial, and environmental factors. Defendants routinely argue that no single product caused the harm, that intervening factors break the chain of causation, or that the science does not support general or specific causation claims. These hurdles are precisely why many cases settle.
But they are also why building a public legal record matters. Without courts grappling with these questions, weighing expert evidence, and issuing findings, the debate remains abstract and easily dismissed as unproven in a court of law.
Governments do not need perfect certainty to legislate, but they do need a defensible factual foundation, and private settlements rarely provide that.
Often out of court settlements do not establish findings of fact, they do not clarify legal duties, and they do not define what constitutes a defective design or a foreseeable risk. As a result, they offer little guidance to lawmakers attempting to draft enforceable safety by design standards.
Without judicial findings, industry can continue to argue that the evidence is inconclusive, that harms are anecdotal, or that regulation would be premature. Settlements resolve individual disputes, however, they do not resolve systemic questions.
Technology companies also benefit from legal frameworks that make trial outcomes rare and uncertain. These include procedural barriers such as arbitration clauses, class action waivers, and complex questions around intermediary liability and speech protections. These shields further incentivize settlement and further reduce the likelihood that courts will issue rulings addressing design level responsibility.
This reality strengthens, rather than weakens, the case for safety by design legislation. When private litigation cannot reliably produce public accountability, regulatory standards become even more important.
Meaningful reform tends to follow outcomes that create durable legal pressure. These include:
Published judicial rulings addressing duty, defect, and foreseeability
Discovery that reveals internal knowledge of risk, that can be tested is court
Verdicts or judgments that survive appeal
Consent decrees or settlements with enforceable design obligations
Legislation grounded in established legal and factual records
These outcomes do not merely impose costs, they alter incentives. They tell companies that certain design choices carry legal risk, not just reputational risk.
At The White Hatter, we recognize the pain behind these cases. We absolutely respect families seeking justice and such out-of-court settlements can offer some closure. However, we also understand how legal systems shape corporate behaviour.
Quiet settlements behind closed doors rarely change how platforms are built. They often prevent the legal and political momentum required to move safety from the margins into the core of product design.
Safety by design will not emerge from payouts alone. It will emerge from transparency, enforceable standards, and outcomes that make harm legally consequential rather than merely compensable. Several other civil cases involving social media companies are currently before U.S. courts. We hope these cases proceed to judgment. However, if past behaviour is any indication, it is likely that many large platforms will once again choose to resolve these matters through substantial out of court settlements rather than face a ruling to help protect their financial interests
Until then, settlements may resolve cases, but they will often not fix the system, and will only be seen as a part of doing business, and that distinction matters.
Digital Food For Thought
The White Hatter
Facts Not Fear, Facts Not Emotions, Enlighten Not Frighten, Know Tech No No Tech
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