The Federal Trade Commission (FTC) and the Los Angeles District Attorney’s Office have taken action against NGL Labs, LLC and its co-founders, Raj Vir and Joao Figueiredo, for violations related to their anonymous messaging app. The defendants will pay $5 million to settle the lawsuit and are banned from offering their "NGL: ask me anything" app to individuals under 18.
The FTC and Los Angeles DA allege that NGL Labs marketed their service to children and teens while falsely claiming that its AI content moderation filtered out cyberbullying and harmful messages. Additionally, they allegedly sent fake messages appearing to come from real people to trick users into signing up for paid subscriptions.
"NGL marketed its app to kids and teens despite knowing that it was exposing them to cyberbullying and harassment," said FTC Chair Lina M. Khan. "In light of NGL’s reckless disregard for kids’ safety, the FTC’s order would ban NGL from marketing or offering its app to those under 18."
Los Angeles District Attorney George Gascón stated, "The consequences of these actions can be severe. The anonymity provided by the app can facilitate rampant cyberbullying among teens, causing untold harm to our young people."
Launched in 2021, California-based NGL allowed users to receive anonymous messages from friends and social media followers. It was marketed as a “safe space for teens” with “world-class AI content moderation.” However, the complaint alleges false claims about AI capabilities, deceptive tactics involving fake messages, failure to disclose recurring charges clearly, and violations of the Children’s Online Privacy Protection Act Rule (COPPA Rule).
Consumers who downloaded the app could share links on social media inviting anonymous responses. In 2022, after failing to generate interest, NGL began sending fake computer-generated messages such as “are you straight?” or “I know what you did.” These tactics aimed at increasing paid user numbers prompted complaints when paying users did not receive promised sender identities but only vague hints.
The complaint also alleges that NGL violated the Restore Online Shoppers’ Confidence Act by not adequately disclosing recurring charges for its Pro service.
Executives directed employees to target high school students directly through social media platforms like Instagram. Despite claims of effective AI moderation, users reported rampant cyberbullying on the platform.
The proposed order requires approval by a federal court before taking effect. It mandates implementing an age gate preventing access for users under 18 without parental consent for those under 13; prohibits misrepresentations about message senders or AI capabilities; requires clear disclosure of recurring charges; and demands express informed consent before billing consumers.
The Commission's vote authorizing the filing of the complaint was unanimous at 5-0. The FTC filed it in the U.S. District Court for the Central District of California with lead attorneys Miles Freeman, Siobhan Amin, Carla Cheung, and John Jacobs from FTC’s Western Region Los Angeles office.
The FTC received assistance from Fairplay and social media reform advocate Kristin Bride.
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