The FTC wants to ban Meta from profiting from kids' data

Meta is in hot water with the Federal Trade Commission once again after the agency proposed more sanctions against the company, which has allegedly failed to fully comply with a 2020 privacy order. Among other things, the agency has proposed a blanket ban on monetizing data Meta collects from users aged under 18, whether they use Facebook, WhatsApp, Instagram or Quest virtual reality headsets.

The proposed sanctions, which the FTC seeks to apply as part of an update to the 2020 order, include a ban on Meta launching new products, services and features unless an assessor confirms that the company is in full compliance with its obligations. Additionally, Meta would have to get explicit consent from users before employing facial recognition tech. All of these measures, plus others the FTC has proposed to strengthen aspects of the 2020 order, would apply to companies that Meta buys or merges with.

The FTC issued the most recent privacy order, which is in place for 20 years, as part of a $5 billion settlement that Meta (then known as Facebook) reached with the agency over the Cambridge Analytica scandal. At the time, the FTC determined that Meta had broken a 2012 order concerning user data privacy. Along with allegedly failing to comply with the 2020 order, Meta has violated the Children’s Online Privacy Protection Act (COPPA), according to the FTC.

“Facebook has repeatedly violated its privacy promises,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.”

Among other things, Meta allegedly misled parents over how much control they have over who their children can communicate with through the Messenger Kids app. The FTC says that, between 2017 and mid-2019, children were able to chat with unapproved contacts through the app in violation of the 2012 order and COPPA.

Moreover, the agency says that Meta continued to provide third-party developers access to user data, despite pledging in 2018 to revoke access to the information if users hadn't accessed their apps within a 90-day period. According to the FTC, Meta allowed third-party developers to maintain access to user data in certain situations until some point in 2020.

An assessor that the FTC appointed to ensure Meta's compliance with the 2020 order found that there were several flaws with the company's privacy program. In its Order to Show Cause, the FTC said that "the breadth and significance of these deficiencies pose substantial risks to the public."

Moreover, the agency says that Meta continued to provide third-party developers access to user data despite pledging in 2018 to revoke access to the information if users hadn't accessed their apps within a 90-day period. According to the FTC, Meta allowed third-party developers to maintain access to user data in certain situations until some point in 2020.

Meta has called the FTC's move "a political stunt." Perhaps unsurprisingly, given the potential impact on its business, Meta is gearing up for a legal battle with the agency. "Despite three years of continual engagement with the FTC around our agreement, they provided no opportunity to discuss this new, totally unprecedented theory," the company said in a statement that spokesperson Andy Stone shared on Twitter.

"Let's be clear about what the FTC is trying to do: usurp the authority of Congress to set industry-wide standards and instead single out one American company while allowing Chinese companies, like TikTok, to operate without constraint on American soil. FTC Chair Lina Khan's insistence on using any measure — however baseless — to antagonize American business has reached a new low. We have spent vast resources building and implementing an industry-leading privacy program under the terms of our FTC agreement. We will vigorously fight this action and expect to prevail."