In the third action the Federal Trade Commission (FTC) has taken against Facebook, the agency has proposed prohibiting the company from monetizing the data of minors, alleging that Facebook violated its 2020 privacy order. Daniel Castro, vice president of the nonprofit research institute Information Technology and Innovation Foundation (ITIF), said the FTC does not have the authority to implement such a ban.
The FTC alleges that Facebook has violated a 2020 privacy order, which took effect in 2021, requiring Facebook to expand its privacy program, enhance security related to personal information, and restrict the use of facial recognition technology, according to a press release from the FTC.
“Facebook has repeatedly violated its privacy promises,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, according to the press release. “The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.”
The FTC has now proposed changes to the 2020 privacy order. The changes would apply to Facebook, as well as Meta's other platforms, which include Instagram, WhatsApp, and Oculus. The proposed changes include banning Facebook from monetizing the data it collects on users under the age of 18, even after those users turn 18. An independent assessor would need to confirm any new products meet privacy program requirements before they are released. Additionally, the proposed changes would expand the restrictions in place on the use of facial recognition technology and would strengthen other privacy requirements, such as third-party monitoring and employee training.
The proposal from the FTC stems from an independent assessor's review of whether Facebook has complied with the 2020 privacy order, according to the release. The assessor found gaps and weaknesses in Facebook's privacy program, and the FTC then determined that those gaps pose a risk to users. Facebook has until early June to respond to the FTC's proposed changes.
Castro issued a statement in response to the FTC's proposal saying that as a regulatory agency, the FTC does not have the authority to impose such a ban.
"The FTC has an important role to play as the lead enforcer of the nation’s consumer protection laws. Sadly, instead of enforcing the laws on the books, it is attempting to unilaterally expand its scope and power beyond its legal authority in ways that would limit the ability of businesses to offer services to children online. The FTC is a regulatory agency, not a legislature. Congress is the right place to decide if and when to impose restrictions on the use of youth data by online platforms. The FTC has no authority to create new laws. There is only one coronation planned for this week, and it isn’t for Lina Khan," Castro wrote in his statement.
"While the FTC can and should ensure that companies comply with consent decrees, in this case, the FTC appears to be launching a politically motivated attack against one of the nation’s leading tech companies. The FTC Commissioners have repeatedly made clear their personal animus toward online platforms that rely on ad-supported business models, but they should still treat these businesses fairly. In this case, the alleged harms appear to be minor, yet the proposed remedies would be substantial. Moreover, the most extreme of these remedies—a call to ban the company from monetizing data of teenagers across all of its platforms, including Facebook, Instagram, WhatsApp, and Oculus—vastly exceeds any legal authority given to the FTC by Congress and would undermine the ability of companies to offer services to youth."
