• by Wendy Davis  @wendyndavis, March 13, 2024

A federal appellate court has rejected Meta's request to halt a Federal Trade Commission administrative hearing that could result in an order prohibiting the company from serving targeted ads to teens.

The D.C. Circuit Court of Appeals said in an order issued Tuesday that Meta hadn't met the standards for an injunction for several reasons -- including that an in-house hearing at the FTC wouldn't cause “irreparable injury” to Meta because the company could appeal the outcome to a federal court.

Meta “does not dispute that a final order in that proceeding will be reviewable by a federal court of appeals,”a three-judge panel of the appellate court wrote, adding that “the expense and annoyance of litigation, including in an FTC proceeding, does not constitute irreparable injury.”

The move clears the way for the FTC to argue at an in-house hearing that Meta should be subject to new, more restrictive terms than it agreed to in a 2020 settlement over allegations that it allowed Cambridge Analytica and other outside developers to access users' data.

That deal, which was approved by U.S. District Court Judge Timothy Kelly in Washington, D.C., required Meta to pay $5 billion, implement new privacy oversight and obtain an independent assessment of the program.

Last May, the FTC proposed modifying the 2020 settlement by adding terms prohibiting Meta from using minors' data to fuel ad targeting or algorithms. The FTC also proposed that Meta should be banned from launching new products or service unless an assessor confirmed that the company's privacy program has no weaknesses.

When FTC put forward the potential new terms, it served Meta with a demand to appear at an in-house administrative proceeding -- similar to a trial, but in front of the agency, as opposed to a judge. The FTC alleged at the time that an evaluator had identified “gaps and weaknesses” in the company's privacy program, and 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 representations about the feature.

Meta then sued in federal court to prevent the FTC from moving forward with an in-house hearing, arguing that only Kelly or another judge could modify the 2020 settlement.

Kelly rejected that argument in November, ruling that he lacked jurisdiction to intervene in the current dispute. He ruled that even though Meta's agreement with the FTC was attached as an exhibit to the judgment he approved, he didn't retain jurisdiction over the terms.

The D.C. Circuit appeared to agree with Kelly's reasoning on that point, essentially holding Meta hasn't yet proven that the FTC lacked authority to modify the settlement terms.

A Meta spokesperson stated Wednesday that the FTC's allegations regarding potential weaknesses in the company's privacy program are "without merit."

"We remain committed to investing in privacy programs that protect people’s privacy and we will continue to vigorously fight the FTC’s baseless and unlawful action," the spokesperson added.