US Court rules against Meta in a privacy battle over profits from users under 18

US District Court for the District of Columbia court rules against Meta over FTC’s push to limit profits from under-18 users, stemming from privacy concerns since May 2023.

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The US District Court for the District of Columbia ruled against Meta in a privacy battle after ruling that the Federal Trade Commission (FTC) may urge Meta to lower the profit gained from users under 18 that use its platforms.

The case goes back to May 2023, when the FTC sought to stop Meta from profiting off of minors’ data due to insufficiently informing the parents of underage children of the extent of control they had over who their children were communicating with on the Messenger Kids app. The FTC proposed modifications to a 2019 settlement with Meta Platforms for $5 billion. These included tighter restrictions on Meta Platforms preventing the company from profiting off data collected from users under 18, including its virtual reality business. Their goal is to enhance privacy for young users by limiting how their data can be monetized.

The FTC has decided not to give an official statement regarding the new ruling. At the same time, Meta’s spokesman deemed the FTC’s allegations ‘without merit’ and stated that they are currently weighing their legal options and will seek to combat the FTC’s ‘unlawful attempt to unilaterally rewrite their agreement’.

Why does it matter?

As social media platforms compete for dominance in the market, they also compete to gain popularity among the younger population. The Pew Research Study Center reported that 62% of teens use Instagram, and 67% use the rival Chinese app, TikTok. With such a large target audience at stake, prohibiting profit for Meta would be a hard-hit pill.

Overall, the legal battle between the FTC and Meta is a focal point in the ongoing debate about the regulation of tech companies, data privacy, and the responsibilities these companies bear, especially when protecting the interests of underage users and their parents.