December 15, 2020

FTC Orders Amazon, Facebook and Other Social Media Giants to Explain Their Data Collection

By Lillian Searles

The Federal Trade Commission has announced that it is launching a new inquiry into some of the largest tech companies and social media platforms in the world. They are asking some of the world’s biggest social media and streaming video giants to hand over information regarding their privacy and data practices.

 

In a press release published Monday, the FTC announced that it is ordering nine social media and video streaming companies — including Amazon, TikTok, Discord, Facebook, Reddit, Snapchat, Twitter, WhatsApp, and YouTube — to provide a variety of information, including how they collect personal data; how they determine what ads are shown to consumers; whether algorithms or other analytics are applied to personal information; how they measure user engagement; and how their practices impact children and teenagers.

 

The companies have 45 days to respond.

 

The FTC’s orders were authorized as part of a wide-ranging investigative inquiry and do not serve specific law enforcement purposes. However, these types of studies, while not necessarily tied to specific investigations, can lead to more formal inquiries down the line. Depending on what information is uncovered in the course of the study, the FTC could pursue enforcement actions should it find wrongful behaviour.

 

The FTC Commission voted 4-1 to send the letters, with Republican commissioner Noah Joshua Phillips the lone “no” vote.

 

“These digital products may have launched with the simple goal of connecting people or fostering creativity. But, in the decades since, the industry model has shifted from supporting users’ activities to monetizing them,” said the three FTC commissioners Rebecca Slaughter, Christine Wilson and Rohit Chopra, who voted to approve the orders, in a joint statement Monday. 

 

“This transition has been fueled by the industry’s increasing intrusion into our private lives,”

 

“The Commission’s study will lift the hood on the social media and video streaming firms to carefully study their engines,” 

 

“Policymakers and the public are in the dark about what social media and video streaming services do to capture and sell users’ data and attention. It is alarming that we still know so little about companies that know so much about us.”

 

In his dissent, Noah Phillips wrote, “The breadth of the inquiry, the tangential relationship of its parts, and the dissimilarity of the recipients combine to render these orders unlikely to produce the kind of information the public needs, and certain to divert scarce Commission resources better directed elsewhere.”

 

In February, the FTC used this same investigative authority to request information on past acquisitions made by big tech companies, including Alphabet, Amazon, Apple, Facebook, and Microsoft. Last week, the FTC sued Facebook to unwind its acquisitions of Instagram and WhatsApp.

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