FTC vs. Meta – does this mean war?

While the US government continues to set its hair on fire over the potential misuse of user data by TikTok, the Federal Trade Commission has quietly accused Facebook owner, Meta of breaching its $5bn privacy settlement after exposing the user data of some 87 million users to Cambridge Analytica.

While, surprisingly, there is no corresponding call for Facebook to be banned from government devices, or indeed banned from states or the country as a whole, the FTC did claim that the platform has – again – improperly shared user data with third parties, and in particular, that it has failed to protect children, as it promised to do when it was slapped with the mega-fine in July, 2019.

A tangled history.

It’s no secret that the FTC and Meta have been at a kind of genteel war for some years now, and the latest announcement from the FTC is a proposal to update the 2020 settlement. In 2021, the FTC filed an antitrust complaint against Meta, aiming to break up the company into smaller units.

It also comes as no surprise to anyone that Meta has more or less continued operating as though multi-billion dollar fines are merely the price of doing business, rather than, as both the FTC and the European data privacy organizations that implement the bloc’s GDPR clearly intend them to be, punitive and instructive devices, designed to change the platform’s behavior.

In fairness to Facebook, its whole premise is based on the monetization of user data, so any attempt to stop it doing so flies directly in the face of the platform’s fundamental DNA.

Perhaps predictably then, the FTC has said Meta should now be banned from monetizing any data it collects from its younger users. It has also said it wants the company stopped from adding any new features to the platform until it has been audited by a third party, to ensure the platform’s privacy policies properly protect users – especially younger users.

And, just as the cherry on its cake of righteous fury, it wants to add new restrictions to how Meta uses facial recognition technology – presumably because that can act as a method of collecting very specific data about users, that could potentially be used by bad actors or unscrupulous brokers.

A spanner in the Metaverse?

That would normally sound far-fetched, but then, Facebook is the platform that was involved in the Cambridge Analytica scandal that may well have changed geopolitics forever on two continents, so there’s arguably a case that Meta brings some data privacy baggage to the table.

Could the FTC’s demands really hurt Facebook and Meta? It’s at least not impossible – Meta’s long-touted expansion into the virtual reality “Metaverse” could be significantly hobbled if the FTC’s recommendations are adopted.

Perhaps understandably, Meta has reacted with a degree of bluster, with a spokesman calling the Commission’s proposal “a political stunt,” and declaring that the company will fight any efforts to further penalize it.

“Despite three years of continual engagement with the FTC around our agreement, they provided no opportunity to discuss this new, totally unprecedented theory,” said spokesman Andy Stone. “FTC Chair Lina Khan’s insistence on using any measure – however baseless – to antagonize American business has reached a new low.”

Fighting words from Meta – which has a long and proven record of misusing the data of its users, and the multiple mega-fines to prove it.

Meanwhile, at TikTok…

It’s worth contrasting that with the attitude of TikTok, which continues to argue for compromise and collaboration with the US government in seeking safety and guarantees for American users’ data, and which was until relatively recently comparatively fine-free among the tech giants – arguably in part due to the newness of the platform’s status among the giant players.

TikTok continues to draw censure from US lawmakers over the fact that its owner, ByteDance, is based in Beijing and therefore might be a security threat, despite its attempts to complete a working agreement over data safety.

The mood of lawmakers in Washington appears to be souring towards tech giants across the board, which might yet see Meta in more hot water than it bargains for – assuming the FTC’s recommendations are approved.

Will they be?

It would be unusual, given that the FTC is aiming to amend a past consent order for a single company, rather than to change the law in a way that would apply to all similar companies. But given that Facebook itself has access to the data of more than a billion users, and its consistent history of accruing mega-fines for data misuse, it’s just conceivable that the Commission might get its way in treating Facebook as a special case.

There are plans afoot to establish an association for “ethical web scraping” businesses. If the FTC and Facebook really do square off in a battle for the supremacy of ideas and rules as they apply to social media, it might well prove to be an idea whose time has come.