A new Federal Trade Commission (FTC) staff report examines the data collection and use practices of major social media and video streaming services, revealing extensive surveillance of consumers to monetize personal information while failing to adequately protect users online, especially children and teens.
The report is based on responses to 6(b) orders issued in December 2020 to nine companies: Amazon.com, Inc. (owner of Twitch), Facebook, Inc. (now Meta Platforms, Inc.), YouTube LLC, Twitter, Inc. (now X Corp.), Snap Inc., ByteDance Ltd. (owner of TikTok), Discord Inc., Reddit, Inc., and WhatsApp Inc.
The orders sought information about how these companies collect, track, and use personal and demographic information; determine which ads and content are shown to consumers; apply algorithms or data analytics; and how their practices impact children and teens.
“The report lays out how social media and video streaming companies harvest an enormous amount of Americans’ personal data and monetize it to the tune of billions of dollars a year,” said FTC Chair Lina M. Khan. “While lucrative for the companies, these surveillance practices can endanger people’s privacy, threaten their freedoms, and expose them to a host of harms from identity theft to stalking. Several firms’ failure to adequately protect kids and teens online is especially troubling.”
The report found that companies collected extensive data that could be retained indefinitely from both users and non-users. The staff highlighted broad data sharing practices raising concerns about the adequacy of data handling controls. It noted that some companies did not delete all user data upon request.
Furthermore, many business models incentivized mass collection for targeted advertising revenue. The incentives posed risks to user privacy due to privacy-invasive tracking technologies like pixels used for ad targeting based on preferences.
The staff report also pointed out inadequate protection for children and teens on these platforms. Despite claims by some companies that no children were using their services due to age restrictions or service designations not directed at children—allegedly avoiding liability under the Children’s Online Privacy Protection Act Rule—the findings indicated otherwise.
Additionally, potential competition implications were noted as significant amounts of user data could lead firms toward market dominance at the expense of user privacy when competition is limited among social media platforms.
Recommendations included comprehensive federal privacy legislation by Congress limiting surveillance with baseline protections granting consumer rights; company limitations on data collection with enforceable minimization policies; deletion policies for unnecessary consumer data; prohibition against sensitive information collection through ad tracking technologies; better transparency in system usage monitoring standards; adherence beyond COPPA minimums recognizing child users' reality on platforms; greater privacy protections for teens over age 13.
The Commission voted 5-0 issuing this report with statements released separately by Chair Khan alongside Commissioners Alvaro Bedoya Melissa Holyoak Andrew N Ferguson respectively leading attorneys Jacqueline Ford Ronnie Solomon Ryan Mehm from Bureau Consumer Protection involved matter
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