Facebook faces data monetization limits in third FTC order

The alleged violations came to light after an independent third party conducted an assessment of Facebook’s progress toward meeting the requirements of the 2020 order and found “gaps and weaknesses” in the company’s privacy program, the FTC said in its order to show cause.

The details: Facebook, now known as Meta, violated a 2012 FTC order by giving app developers access to users’ private data as recently as mid-2020, the FTC said. The alleged violations of the 2012 order led to the 2020 order and a $5 billion penalty against the company.

Facebook also allegedly violated the Children’s Online Privacy Protection Act (COPPA) Rule, which mandates websites aimed at children under 13 first receive parents’ consent before gathering any personal data from children.

The commission voted 3-0 to move ahead with the new order, the FTC said in a press release.

Compliance considerations: Under the proposed order, the FTC would prohibit Meta from monetizing any data it gathers from children and teens under 18 years old using any of its services, including Messenger, Instagram, and WhatsApp. Meta would be prohibited from launching any new services or products unless a third-party risk assessor confirmed in writing the associated privacy controls complied with the agency’s mandates.

The FTC asked Meta to respond within 30 days to its findings, including allegations that from late 2017 to mid-2019, “Facebook misrepresented that parents could control whom their children communicated with through its Messenger Kids product.”

“Despite the company’s promises that children using Messenger Kids would only be able to communicate with contacts approved by their parents, children in certain circumstances were able to communicate with unapproved contacts in group text chats and group video calls,” the FTC alleged.

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

Company response: “The FTC’s latest complaint against Meta is a political stunt,” the company said in a statement. “It’s a clear attempt 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.”

Related legislation: Separately Wednesday, Sens. Ed Markey (D-Mass.) and Bill Cassidy (R-La.) reintroduced a bill that would update COPPA to prohibit internet companies from collecting personal data from users between 13 to 16 years old without their consent.

The law “is overdue for an update in light of major changes in the online landscape,” Markey said in a press release. “Over 90 percent of parents agree that existing children’s privacy rules should be extended to teenagers.”