At the end of this work week, the US Federal Trade Commission (FTC) reported that its investigation revealed that certain social networks and streaming services collected personal data more extensively than declared. In fact, a number of companies are accused by US authorities of unauthorized collection of information about consumers, including minors.
Image source: Unsplash, Ian Hutchinson
According to The New York Times, nine companies came under suspicion, including Meta✴ Platforms, YouTube and TikTok. Providing their services primarily free of charge to users, they make money by collecting information about them for the purpose of further selling it to advertisers. The latter, with the help of a detailed demographic profile of the audience, can specifically promote certain products and services of their clients. In addition, these companies, according to the FTC, do not protect users well enough, especially children and adolescents.
According to the FTC, the commission began its investigation almost four years ago with the goal of the first-ever detailed study of the “opaque business practices” of the largest online platforms, which operate multibillion-dollar advertising turnover thanks to access to user information. According to the agency, the investigation proves the need to strengthen control over this area by US federal law, as well as introduce some restrictions on the ways in which companies use personal data.
FTC Chairman Lina Khan said, “Surveillance practices threaten people’s privacy and freedoms, exposing them to a range of threats from identity theft to stalking.” American regulators have long expressed concern about the influence of social networks on the mental health of the younger generation of citizens, but so far, attempts by legislators to strengthen control over this area have largely failed. Lina Khan also noted that attempts to strengthen self-regulation measures for companies also led nowhere.
The FTC began its investigation in December 2020, covering the activities of nine companies that own 13 platforms. The commission based its conclusions on the basis of studying data on the activities of companies in the period from 2019 to 2020, paying primary attention to methods of collecting information, its use and storage. The regulators came to the attention of the platforms YouTube, TikTok, Facebook✴, Whatsapp, Instagram✴, Messenger, Twitch, Discord, Snapchat, Reddit and X. The management of the commission did not explain to what extent this or that company violates the interests of users in terms of protecting personal data.
The FTC found that companies obtained missing information about users through other platforms, and sometimes bought additional data about people who were not their customers. Most companies collected information about the age, gender and language preferences of users, some supplemented it with data on education, income level and marital status. At the same time, users had no real opportunity to refuse to provide information about themselves, and companies often stored information for much longer than required under the terms of the agreement with users. Customer information was literally compiled into detailed dossiers to provide to advertisers.
Regulators also discovered a sufficient number of users under the age of 13 on platforms that, at the level of rules, declared a ban on their connection to their resources. In many applications, the same amount of data was collected from adolescents as from adults. Some companies even found it difficult to explain to investigators how large the volume of data collected was.
Lina Khan initiated the process of creating rules for displaying advertising to users of online services the year before last. In January, Epic Games was forced to agree to pay a fine of $500 million for violating laws regarding the privacy of minors. In 2022, social network X (formerly Twitter) was fined $150 million for abuses in the use of customer data for targeted advertising.