Recently, Facebook, Instagram, and WhatsApp’s parent company, Meta, found itself in court with the US Federal Trade Commission (FTC) over the FTC’s plans to strengthen a privacy order set to go into effect in 2019. The Federal Trade Commission (FTC) claimed that Meta misled parents about their ability to monitor their children’s use of the Messenger Kids app and suggested that Meta add a prohibition on profiting from the data of minors to the existing privacy agreement.
Since Meta did not agree to the FTC’s proposal, Meta’s attorney James Rouhandeh argued that the case should be dismissed by Judge Timothy Kelly of the US District Court for the District of Columbia. However, Solicitor General Zachary Cowan argued for the Federal Trade Commission, arguing that the FTC has the authority to determine whether or not settlements should be amended and that the district court lacks jurisdiction.
While expressing doubt about Meta’s jurisdictional arguments, Judge Kelly indicated that he would likely issue a ruling before the end of the year. The central question is whether Meta and the FTC will go to district court or an FTC judge to decide whether the 2019 agreement should be modified in the absence of a settlement.
Possible Alterations and Their Effect on Meta
The FTC wants to make some changes, such as restricting the use of facial recognition technology and prohibiting Facebook from profiting off of data collected from users under the age of 18, with the latter restriction also applying to Facebook’s virtual reality business. Since more than 98% of Meta’s revenue comes from personalized digital advertising, these shifts could have a major effect on the company’s operations. Meta also has to contend with TikTok for the attention of its target audience, young people.
Earlier Agreements and the Current Legal Struggle
The FTC has reached settlements with Facebook before regarding privacy issues. To settle allegations of violating a 2012 consent order by misleading users about the control they had over their personal data, Facebook agreed to pay a record $5 billion fine in 2012. In 2020, the order was finalized. The Federal Trade Commission sued Facebook in 2020 to prevent the social media giant from keeping its Instagram and WhatsApp properties. The trial in this case, however, has not yet begun.
See first source: Reuters
What is the current legal dispute between Meta and the FTC about?
Meta, the parent company of Facebook, Instagram, and WhatsApp, is in court with the Federal Trade Commission (FTC) over proposed amendments to a privacy order set to go into effect in 2019. The FTC claims that Meta misled parents regarding monitoring their children’s use of the Messenger Kids app and seeks to add a prohibition on profiting from minors’ data.
Why did Meta argue for the case’s dismissal?
Meta’s attorney argued for the case’s dismissal, asserting that the FTC’s proposed amendments were unwarranted. Meta believes the case should not proceed, primarily based on jurisdictional grounds.
What jurisdictional dispute has arisen in this legal battle?
Meta argues that the case should be dismissed, while the FTC maintains its authority to determine settlement amendments. There’s a dispute over whether the district court or an FTC judge should decide whether the 2019 agreement should be modified if a settlement is not reached.
What potential alterations does the FTC want to make to the privacy order?
The FTC aims to restrict the use of facial recognition technology and prohibit Meta from profiting from data collected from users under 18. This restriction would also apply to Meta’s virtual reality business.
How could these changes affect Meta’s operations?
As more than 98% of Meta’s revenue comes from personalized digital advertising, these proposed changes could significantly impact the company’s business model. Additionally, Meta faces competition from platforms like TikTok for the attention of young users.
Has Meta faced FTC actions regarding privacy before?
Yes, Meta has previously settled with the FTC on privacy issues. In 2012, Meta (then Facebook) paid a record $5 billion fine to settle allegations of violating a 2012 consent order related to user data control. In 2020, the FTC also sued Meta to prevent it from keeping Instagram and WhatsApp properties, although the trial for this case has not started yet.
Featured Image Credit: Tingey Injury Law Firm; Unsplash – Thank you!