FTC suggests prohibiting Meta from exploiting minors’ data for profit

The Federal Trade Commission (FTC) has accused Facebook (META.O) of misleading parents about the protection of children and has proposed to tighten an existing agreement on privacy. The proposed deal would include a ban on making money from minors’ data. The FTC alleges that Facebook misled parents about the level of control they had over who their children communicate with through the Messenger Kids app.

Additionally, the FTC claims that Facebook was deceptive about how much access app developers had to users’ private data, which breaches a 2019 agreement on privacy.

The FTC’s proposed changes to the existing agreement with Meta would prohibit the company from monetizing the data collected on users under 18, including data collected from its virtual reality business. In addition, the proposed changes would impose stricter limitations on the company’s use of facial recognition technology.

Following the announcement of the proposed changes, Meta’s shares experienced a brief decline of 2% but eventually recovered and were down 0.3% at $238.50. Meta generates over 98% of its revenue from targeted digital advertising based on user data, and the proposed changes could significantly impact its business model.