FTC Claims Meta Violated Order, Seeks Ban on Kids’ Data Monetization

Meta “misled parents” about communication controls for its Messenger Kids app and “misrepresented the access it provided some app developers to private user data,” the agency said, issuing proposed changes to the 2020 order. The ban, as proposed, would extend to all Meta products, including Facebook, Instagram, WhatsApp and Oculus, as well as future companies it owns.

The FTC, which is without any Republican commissioners, voted 3-0 to approve an order directing Meta to show cause as to why the order shouldn’t be modified. Commissioner Alvaro Bedoya issued a statement saying there are “limits to the Commission’s order modification authority.” In this case, “the relevant question is not what I would support as a matter of policy,” he said. When the commission attempts to modify an order, it must “identify a nexus between the original order, the intervening violations, and the modified order,” he said. “Based on the record before me today, I have concerns about whether such a nexus exists for proposed Provision I.” Provision I applies to the ban against the monetization of youth user data.

The changes apply to the FTC’s order stemming from Facebook’s Cambridge Analytica scandal, for which the company agreed to pay $5 billion in 2020 after violating a previous privacy order from 2012. Wednesday’s order to show cause alleges Facebook violated the 2012 and 2020 orders by “by continuing to give app developers access to users’ private information after promising in 2018 to cut off such access if users had not used those apps in the previous 90 days.”

The agency gave Meta 30 days to respond. The proposed changes were issued using authority under FTC Act Section 5 and Commission Rule 3.72, which allow the commission to reopen administrative cases and modify orders when the FTC finds “changed conditions of fact or law or [when the] public interest” may require such action, the agency said.

The company would be banned from monetizing the user data even after those users turn 18, the agency said. Another proposed change is to block Meta from releasing new products or services until it receives written confirmation from an independent assessor verifying that its privacy program is in “full compliance.” Meta didn't comment.

Legislators on Capitol Hill are trying to move various pieces of legislation involving kids' privacy and online safety (see 2305020053). The Senate Judiciary Committee is expected to formally consider the Earn It Act and the Stop CSAM Act during markup on Thursday. Public Knowledge on Wednesday repeated its opposition to both bills, as well as the Cooper Davis Act, which seeks to hold social media platforms more accountable for drug-overdose deaths stemming from platform activity. Public Knowledge called them well-intended bills that could have negative consequences on the communities they’re trying to protect by driving perpetrators into nonpublic forums.

Sen. Ron Wyden, D-Ore., spoke in opposition to the Earn It Act, the Stop CSAM Act and the Kids Online Safety Act Wednesday during an event with Fight for the Future, which is also opposed. The Parents Television and Media Council urged Congress to pass KOSA and the Earn It Act on Wednesday. “The burden of protection cannot be placed solely on parents -- the challenges are too great,” said Vice President Melissa Henson. “Children are up against social media algorithms that can feed harmful content to children on repeat and against corporate interests that market explicit content to children without repercussions.” Sens. Ed Markey, D-Mass., and Bill Cassidy, R-La., reintroduced their Children and Teens’ Online Privacy Protection Act (COPPA 2.0) on Wednesday (see 2303220064).