• by Wendy Davis  @wendyndavis, May 3, 2023

Meta Platforms violated prior privacy settlements, and as a result should be prohibited from monetizing minors' data, including by using it to fuel ad targeting or algorithms, the Federal Trade Commission said Wednesday.

“Facebook has repeatedly violated its privacy promises,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, stated. “The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.”

In addition to a proposed ban on harnessing data collected from users under the age of 18, the FTC also seeks new restrictions on the company's ability to release new products -- including a prohibition on new launches without an assessor's confirmation that Meta's privacy program has no gaps or weaknesses.

The proposal would modify a $5 billion consent decree entered into in 2020.

A Meta spokesperson called the FTC's move a “political stunt,” and said the company plans to oppose the agency's proposed terms.

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

He added that the FTC was trying to “usurp the authority of Congress to set industry-wide standards and instead single out one American company while allowing Chinese companies, like TikTok, to operate without constraint on American soil.”

The 2020 consent decree largely stemmed from allegations that the company allowed Cambridge Analytica and other outside developers access to users' data.

A prior consent decree, entered in 2012, prohibited Meta from misrepresenting the extent to which it makes users' information available to third parties

Aside from the $5 billion fine, the 2020 settlement required Meta (then named Facebook) to implement new privacy oversight, and called for an independent assessment of the program.

The FTC said Wednesday that an independent assessor “identified several gaps and weaknesses” in the company's privacy program, but many of the details were blacked out from the papers made available to the public.

The 2020 consent decree contained a provision immunizing Meta from known privacy violations that occurred before mid-2019. Former commissioner Rohit Chopra opposed that settlement, arguing that it could prevent the agency from prosecuting the company over prior alleged violations of the Children's Online Privacy Protection Act. 

He said at the time that the FTC should have been “transparent” about which claims were released by the deal.

Despite the immunity provisions in the 2020 decree, the FTC alleged Wednesday that between 2017 and 2019, Meta's Messenger Kids had coding errors that allowed children to communicate with people who hadn't been approved by parents, in violation of statements about the service's features.

The agency contends that those glitches violated the Children's Online Privacy Protection Act, and support the agency's proposal to modify the prior order.

FTC Commissioner Alvaro Bedoya stated Wednesday that he has concerns over whether the agency has authority for the revisions it is now seeking.

“When the Commission determines how to modify an order, it must identify a nexus between the original order, the intervening violations, and the modified order,” he stated, adding that he has concerns over the connection between the alleged violations and the proposal that Meta stop monetizing minors' data.

Bedoya added that the alleged misrepresentations about Messenger Kids were resolved before the 2020 order was issued.

Some advocacy groups, including Public Citizen, Fairplay and the Center for Digital Democracy, praised the FTC's move.

"Today’s action by the FTC limiting how Meta can use the data it gathers will bring critical protections to both children and teens," the Center for Digital Democracy stated. "It will require Meta/Facebook to engage in  a proper 'due diligence' process when launching new products targeting young people -- rather than its current method of 'release first and address problems later approach.'"

Insider Intelligence analyst Debra Aho Williamson stated Wednesday that the FTC's proposed terms wouldn't have a “significant” impact on the company's ad revenue, given that most users are over 18 -- but could hinder its ability to launch new or revised products.