With Meta already dealing with a growing array of restrictions on its ad targeting tools, as a result of changes to data usage regulations, along with Apple’s iOS 14 update, it could soon face another challenge, with the FTC moving to ban the company from monetizing youth data entirely.
Under a new decree from the Trade Commission, Meta would be banned from collecting any data, unless for security purposes, from all users under the age of 18, and monetizing such, until they become adults.
The FTC claims that Meta has violated the terms of its 2020 privacy order, which stipulated that Meta needed to implement a range of strict controls over data usage as a result of the Cambridge Analytica scandal. Meta was also fined $5 billion as part of the settlement.
Specifically, the FTC says that Meta has misrepresented the controls that parents have over who their kids are able to communicate via Messenger Kids, while it also alleges that Meta has continued to grant app developers access to users’ private information.
As a result, the FTC is now moving to the next stage of a broader data usage ban.
As per the FTC:
‘Facebook has repeatedly violated its privacy promises. The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.’
As part of the FTC’s proposed changes, Meta would be prohibited from profiting from any data that it collects, including through its VR products, from users under the age of 18, while Meta would also be subject to expanded limitations in other areas, including the use of facial recognition technology.
The FTC also says that Meta would be required to pause the launch of all new products and services pending an independent assessment of its compliance with these terms.
Meta will now have 30 days to respond to the order, before the FTC considers next steps in the case.
Meta has already issued a statement on the new push:
Meta's statement on the FTC's political stunt. pic.twitter.com/XEPHvriKFY— Andy Stone (@andymstone) May 3, 2023
Interesting to see Meta throwing TikTok under the bus instead – which has become a new deflection tactic, for both companies, as they seek to divert regulatory attention.
So, what comes next?
Well, Meta’s clearly going to stand its ground and challenge these claims – and given the fines that it copped last time, that makes perfect sense. But as noted, Meta’s also dealing with significant challenges to its ad business, which have already cost the company a heap in lost revenue.
Any loss of user data access will compound this even further, so Meta has even more impetus to challenge the latest FTC claims, in order to maintain its current systems.
In any case, Meta will now have to show cause for its alleged violations, and the FTC will need clear legal basis to push things to the next stage, if it chooses to do so. That could have big impacts for the company long-term, but it’s too early as yet to know what the full impacts may be.
UPDATE: Meta has published a response to the FTC filing, in which it disputes all of the FTC's claims and vows to 'vigorously fight' the action.