FTC seeks to ban Meta from monetising children’s data

The Federal Trade Commission is seeking to ban Meta, the parent company of Facebook and Instagram, from monetising children’s data and further limit its use of facial recognition technology.

The FTC’s proposal on Wednesday called for a blanket prohibition on Meta’s ability to commercialise data it collects from users aged 18 or younger, including via virtual reality products. It comes in response to what the FTC alleged were violations of an order issued in 2020 in the wake of the Cambridge Analytica data scandal.

“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.”

The order required Meta to pay a $5bn penalty and complete a privacy review of all new or tweaked products. But the FTC said on Wednesday that an independent assessor “identified several gaps and weaknesses” in the company’s privacy programme.

It accused Meta of misleading parents about the extent to which they could control who their children contacted on the Messenger Kids app and misrepresenting “the access it provided some app developers to private user data”.

The proposed measures would apply to Facebook and other services, including WhatsApp, Instagram and Oculus. The FTC is also seeking to expand restrictions on Meta’s use of facial recognition technology, forcing the company to disclose and acquire users’ consent.

The proposals come as Meta battles a wider economic slowdown and advertising slowdown, as well as investor frustration with chief executive Mark Zuckerberg’s costly plan to build an avatar-filled metaverse. Facing pressure from Wall Street, Zuckerberg has ordered mass job cuts and a dramatic restructuring as part of what he deems a “year of efficiency”. 

There has also been growing bipartisan support for increased regulation to protect the safety and wellbeing of children and teens amid fears that social media platforms are contributing to a mental health crisis.

Meta described the FTC action as a “political stunt” that it would “vigorously fight”, in a statement.

“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 an American company while allowing Chinese companies, like TikTok, to operate without constraint on American soil.”

It added: “FTC Chair Lina Khan’s insistence on using any measure — however baseless — to antagonise American business has reached a new low.” 

A progressive antitrust regulator and prominent Big Tech critic, Khan has vowed to crack down on the industry’s misconduct.

Meta has 30 days to respond to the FTC’s proposal, after which the agency will assess whether to ultimately enforce the measures. It can appeal against the decision in federal court.

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