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FTC Targets Amazon, Facebook in Data Practices Review
Posted
December 15, 2020
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December 15, 2020
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0:48Now PlayingThe top U.S. privacy regulator ordered some of the biggest technology companies, including Amazon.com Inc., Facebook Inc. and Google’s YouTube, to hand over information about how they collect and use information from users.
The Federal Trade Commission said Monday it is issuing sweeping demands for information to the companies, saying their use of consumer data is “shrouded in secrecy.”
The move intensifies the U.S. government’s scrutiny of the tech industry’s business practices. The FTC last week sued Facebook for alleged violations of antitrust laws, a case that came on the heels of a Justice Department complaint against Google. The FTC is also reviewing past acquisitions of startups by tech giants.
“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,” three FTC commissioners said in a statement. “It is alarming that we still know so little about companies that know so much about us.”
The agency is also asking about the companies’ advertising and user engagement practices, and how their practices affect children and teens.
The review will “lift the hood on the social media and video streaming firms to carefully study their engines,” said the three commissioners -- Democrats Rebecca Kelly Slaughter and Rohit Chopra and Republican Christine Wilson.
Republican Chairman Joe Simons joined the three in voting for the study, while GOP Commissioner Noah Phillips voted against it, calling it “an undisciplined foray into a wide variety of topics.” Chopra and Wilson had previously made calls for a similar study.
Axios reported earlier on the study.
The orders are also being sent to ByteDance Ltd., which operates the popular short-video service TikTok, Discord Inc., Reddit Inc., Snap Inc., Twitter Inc. and Facebook’s WhatsApp. The companies have 45 days from the date they receive the order to respond.
Amazon and Facebook declined to comment. YouTube, TikTok and Snap didn’t respond to requests for comment.
A Twitter spokeswoman said the company is working “to ensure the FTC has the information it needs to understand how Twitter operates its services.”
A Reddit spokesperson said it’s “looking forward to working with the FTC and sharing with them” its policies and practices. A spokesperson for Discord noted that the social platform popular with gamers doesn’t have ads, and said the company “takes user privacy very seriously” and will work “with the FTC to answer their questions.”
The FTC is issuing the orders under Section 6(b) of the FTC Act, which authorizes it to conduct wide-ranging studies. They don’t have to have a specific law enforcement purpose, but the information can be used in future enforcement.
The commission, which polices both competition law and privacy, is also using its authority to look into the data practices of internet service providers.
The FTC has hit Facebook, YouTube and Musical.ly, which is now TikTok, with fines for privacy lapses. Last year, Facebook agreed to pay a record $5 billion to settle privacy violations stemming from the Cambridge Analytica scandal, in which a consulting firm hired by President Donald Trump’s campaign obtained data without users’ knowledge.
Some Democratic lawmakers applauded the move, as did children’s privacy advocates.
“These 6(b) studies will provide a much-needed window into the opaque data practices that have a profound impact on young people’s well-being,” said Josh Golin, executive director of the Campaign for a Commercial-Free Childhood, which has called for similar probes.
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