FTC proposes barring Meta from monetizing kids’ data


Mark Zuckerberg, chief executive officer of Meta Platforms Inc., left, arrives at federal court in San Jose, California, US, on Tuesday, Dec. 20, 2022. 

David Paul Morris | Bloomberg | Getty Images

The Federal Trade Commission proposed on Wednesday barring Facebook parent company Meta from monetizing kids’ data after it says the company violated a 2020 privacy order.

According to the FTC, an independent assessor found “several gaps and weaknesses in Facebook’s privacy program” that posed “substantial risks to the public.”

The company had agreed to independent assessments of its updated privacy program as part of the 2020 settlement, under which Facebook paid a $5 billion civil penalty following an FTC investigation around the Cambridge Analytica data scandal. The FTC alleges Facebook also violated an earlier 2012 order by continuing to allow app developers access to private user information. Facebook allowed third-party apps to access user data until mid-2020 in some cases, the FTC alleges.

The FTC is also accusing Meta of violating the Children’s Online Privacy Protection Rule by misrepresenting parental controls on its Messenger Kids app. The COPPA Rule requires parental consent for websites to collect personal information from kids under 13. The FTC alleged that while the company marketed that the app would only allow kids to talk with contacts their parents approved, children were able to communicate with additional contacts in group chats or group video calls in some circumstances.

As a result, the FTC is proposing to strengthen the terms of the 2020 agreement to put additional restrictions on the company, which would apply to all of Meta’s services including Facebook, Instagram, WhatsApp and Oculus. The proposed terms include a blanket ban on monetizing data from users under 18. That means any data collected from these users could only be used for security reasons and any data collected while users are under age could not be later monetized once they turn 18.

The FTC also seeks to impose a pause on the company’s ability to launch new or modified products or services until the independent assessor confirms in writing that Meta’s privacy program is in full compliance with the terms of the agreement. Compliance with the 2020 order would also extend to any companies Meta acquires or merges with.

The proposal would also require Meta to get affirmative consent from users for future use of facial recognition technology.

The agency gave Meta 30 days to respond to the FTC’s findings. After Meta responds, the Commission will decide whether updating the 2020 order “is in the public interest or justified by changed conditions of fact or law.”

The Commission, which currently has no Republicans serving in what is usually a five-member panel due to recent resignations, voted 3-0 to approve the order to show cause.

Commissioner Alvaro Bedoya, a Democrat, released a statement saying that while he voted to order Meta to show cause for why the FTC need not modify its 2020 agreement, he has concerns about whether the alleged violations warrant a change, especially the blanket monetization ban.

“There are limits to the Commission’s order modification authority,” Bedoya wrote, adding that there needs to be “a nexus between the original order, the intervening violations, and the modified order.”

Facebook spokesperson Andy Stone called the FTC’s move a “political stunt.”

“Despite three years of continual engagement with the FTC around our agreement, they provided no opportunity to discuss this new, totally unprecedented theory,” Stone said. “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.”

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