Meta Mounts Counterattack on FTC’s Power to Police Kids’ Data
The agency on May 3 accused Meta of breaching an earlier FTC order and subsequent settlement that forced the tech giant to pay a $5 billion fine over mishandling consumer data and to implement a series of privacy oversight mechanisms. Now the commission is seeking added restrictions on Meta’s data practices, including a prohibition on selling information collected about young users for targeted ads or otherwise using such data for commercial gain. It would apply to Meta’s Facebook, Instagram, WhatsApp, Messenger, and Oculus platforms.
The FTC could be challenged for potentially exceeding its authority, former agency officials said, though the commission has found flexibility in its broad consumer protection responsibilities in the past.
“What the commission is proposing is a pretty strict regimen” for protecting minors’ data, said David Vladeck, a professor at Georgetown University’s law school who previously directed the FTC’s Bureau of Consumer Protection during the Obama administration. Vladeck added that the potential expansion of the FTC’s existing order against Meta “may not be adequately targeted to the wrongs suggested here.”
The commission claims that, due to coding errors, Meta misled parents about their ability to control who their children communicated with on its Messenger Kids app. Meta pushed back in a blog post, saying the company quickly fixed errors and informed the FTC and users about them.
Meta’s post called the FTC’s action “a political stunt.” The company pledged to fight the agency and said it expects to prevail. A Meta spokesperson declined to comment beyond the blog post.
One of the five-member commission’s three Democrats, Alvaro Bedoya, questioned whether the agency had legal grounds to apply limits on the use of minors’ data based on the privacy violations it alleged.
If Meta brings an appeal over the proposed FTC action, a court would be likely to agree with concerns about overstepping agency authority, according to Bloomberg Intelligence analyst Matthew Schettenhelm.
The administrative proceeding opened this week marks the third time the FTC has taken action against Meta for allegedly failing to protect users’ privacy. The agency’s latest action also accused the company of continuing to give app developers access to users’ private information after promising to cut off access if users had not used those apps recently.
“Facebook’s repeated failures to follow FTC orders put its users at risk, and this proposed relief is appropriate and necessary given the breadth of the alleged violations,” a spokesperson for FTC staff said in a statement.
Expanding ‘COPPA’
Messenger Kids is designed to offer a safe space for kids to connect with family and friends approved by their parents. Coding errors, however, sometimes resulted in users of the app being able to communicate with their contacts’ friends who were not themselves parent-approved contacts.
“We found that these were all friends-of-friends, and when we notified the parents of the impacted users, we shared details of who was chatting with whom and additional resources on parental controls and online safety,” Meta’s blog post said.
The agency is suggesting that the messaging mishap violated the Children’s Online Privacy Protection Act, or COPPA, a federal law that shields information about kids who are younger than 13. The commission’s proposed new curbs for Meta’s handling of minors’ data would apply to users of its platform who are under age 18.
The agency is “essentially expanding COPPA” only for Meta, said James Cooper, a professor at George Mason University’s law school who formerly served as a FTC official and adviser to a Republican commissioner.
Lawmakers in Congress have floated legislation that would broaden COPPA to cover teenagers. The bill faltered in the most recent legislative session and was just reintroduced in the Senate this session.
The regulatory order with Meta is being used as “a vehicle to enact a policy preference,” Cooper said.
In another recent enforcement action against Epic Games Inc. over the video game Fortnite’s use of children’s data, the FTC claimed COPPA violations and alleged that in-game purchases were designed in a way that was unfair to consumers. The second set of allegations relied on the FTC Act’s broad protections against unfair and deceptive business practices.
“We’re seeing an FTC that is thinking outside the box in ways that previous ones have not,” said Dona Fraser, senior vice president for privacy initiatives at BBB National Programs. The organization runs a program that helps companies ensure their compliance with children’s privacy law through data questionnaires and product testing.
Fraser urged Meta to join such a compliance program to show its commitment to protecting kids’ data. Meta didn’t immediately respond to a request for comment on whether it’s part of one.
Ad Limits
Under the FTC’s proposed new privacy regime for Meta, the company could collect and use minors’ information only to provide a service or for security purposes, but not for targeted advertising or other purposes.
Meta has already limited what kind of information is used to inform ads for teens on its apps. The company withdrew the ability for advertisers to target teens based on their interests and activities. Advertisers will only be able to use age and location data to reach teens, after Meta also removed gender as a targeting option.
Children’s advocates have repeatedly raised concerns that Meta shouldn’t be trusted with kids’ information given the company’s past history of privacy transgressions, including the Cambridge Analytica data-harvesting scandal.
Groups such as Fairplay and the Center for Digital Democracy have urged Meta to scrap its messaging platform for kids, as well as a kids-focused version of the photo-sharing app Instagram. The company paused work on Instagram Kids after media reports showed Facebook downplayed its own research finding the social media platform can harm the mental well-being of its youngest users.
More recently, advocacy organizations and children’s safety experts called on Meta to terminate its plans to allow minors into its new virtual reality world.
“This is a company that has continually put its own profits ahead of well-being and safety,” said Josh Golin, executive director of the nonprofit Fairplay.
