FTC proposes to stop Meta from monetizing children’s data

  • The Federal Trade Commission proposed to prevent Facebook parent company Meta from monetizing children’s data after it said the company violated a 2020 privacy directive, the company announced on Wednesday.
  • According to the FTC, an independent evaluator found “numerous gaps and weaknesses in Facebook’s privacy program” that posed “substantial risks to the public.”

Meta Platforms Inc. CEO Mark Zuckerberg leaves and arrives at a federal courthouse in San Jose, California, U.S., Tuesday, Dec. 20, 2022.

David Paul Morris | Bloomberg | Good pictures

The Federal Trade Commission on Wednesday proposed to bar Facebook parent Meta from monetizing children’s data after it said the company violated the 2020 privacy directive.

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

The company agreed to independent evaluations of its revamped privacy program as part of a 2020 settlement in which Facebook paid a $5 billion civil penalty following an FTC investigation surrounding the Cambridge Analytica data scandal. The FTC alleges that 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 in some cases until mid-2020, the FTC alleges.

The FTC alleges Meta violated the Children’s Online Privacy Protection Act by misrepresenting parental controls on the Messenger Kids app. COPPA requires parental consent for websites to collect personal information from children under the age of 13. The FTC alleged that children could communicate with additional contacts in the group, even though the company marketed that it would only allow children to talk to contacts approved by their parents. Chats or group video calls in some situations.

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As a result, the FTC is proposing to strengthen the terms of the 2020 agreement to impose additional restrictions on the company that would apply to all of Meta’s services, including Facebook, Instagram, WhatsApp and Oculus. The proposed regulations also include a ban on monetizing data from users under the age of 18. This means that any data collected from these users will only be used for security reasons and no data collected can be monetized later if the users are under 18 years of age.

The FTC seeks to suspend the company’s ability to launch new or modified products or services until an independent evaluator confirms in writing that Meta’s privacy plan fully complies with the terms of the agreement. Compliance with the 2020 order will extend to any entities that Meta acquires or merges with.

The proposal also requires obtaining affirmative consent from users for future use of facial recognition technology.

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

The commission, which has no Republicans on its usually five-member panel due to recent resignations, voted 3-0 to approve the order to show cause.

Facebook spokesperson Andy Stone was invited The FTC’s action was a “political stunt.”

“Despite three years of continuous engagement with the FTC around our contract, they have offered no opportunity to discuss this new, completely unprecedented theory,” Stone said. “Under the terms of our FTC settlement, we have devoted extensive resources to developing and implementing an industry-leading privacy program. We will vigorously fight this action and expect to prevail.”

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