Meta faces blanket FTC ban over use of minors' data for targeted advertising

The Federal Trade Commission (FTC) on Wednesday proposed a ban on Meta Platforms using data it collects on its underaged users for commercial purposes.

The potential prohibition comes as part of a swath of changes the FTC wants to make to the 2020 privacy order it has with Meta, the corporate parent of Facebook, Instagram and WhatsApp. Meta was also hit Wednesday with allegations from the FTC of breaches of both the Children’s Online Privacy Protection Act Rule and that order.

The FTC and the tech company agreed to an order in 2012 prior to the more recent one, which was announced in 2019 and accompanied by a $5 billion penalty, according to the agency’s press release.

The alteration banning profiting off kids’ data would make it so that Meta "could only collect and use such data to provide the services or for security purposes," per the release. It said that, under the proposal, the data also wouldn’t be available for use for "commercial gain even after those users" became adults.

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Other proposed changes to the 2020 order were wider restrictions on Meta’s usage of facial recognition technology and a requirement of assessor confirmation of privacy program compliance before any "new or modified products, services or features" can be rolled out by the company, the FTC said. Meta could also see some more privacy-related requirements under the proposal, among other things.

Meta responded to the FTC’s proposed changes via a statement shared on Twitter by its policy communications director, Andy Stone. 

The company said the FTC "provided no opportunity to discuss this new, totally unprecedented theory" despite "three years of continual engagement with the FTC around our agreement." It slammed the move as a "political stunt."

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The company criticized FTC Chair Lina Khan and accused the FTC of trying to "usurp the authority of Congress to set industry-wide standards" as well.

"We have spent vast resources building and implementing an industry-leading privacy program under the terms of our FTC agreement," the statement continued. "We will vigorously fight this action and expect to prevail."

Meta has 30 days to respond to the FTC. The vote to issue the order to show cause for the proposed changes was 3-0. 

The FTC made allegations of the tech company "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." Some kids "in certain circumstances were able to communicate with unapproved contacts" in group chats and calls, something that constituted a misrepresentation of Meta’s Messenger Kids parental controls, the FTC also claimed.

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One of commissioners listed on the order to show cause, Alvaro Bedoya, said he had "concerns about whether such a nexus exists" regarding the proposed ban on monetizing data collected on children "based on the record before me today." 

"I look forward to hearing additional information and arguments and will consider these issues with an open mind," he concluded his statement.

Meta’s stock price sat around $237 on Wednesday afternoon, slightly lower than where it opened in the morning.