The Federal Trade Commission has proposed barring Meta from monetizing the data it collects from young people.
The tech giant, which owns Facebook, has also been accused of repeatedly misleading parents and violating a 2020 privacy order.
These new allegations represent a strong move by the FTC and could limit Meta’s ability to target advertising towards children.
The company has 30 days to respond to the allegations.
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A spokesperson for Meta termed the FTC’s action “a political stunt.”
They said the FTC sought to “usurp the authority of Congress to set industrywide standards and instead single out one American company.”
The company has also said it has spent vast resources building and implementing an industry-leading privacy program under its agreement with the FTC.
The proposed sanctions would prohibit Meta from profiting from data it collects from users aged under 18.
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The company would also be subject to other limitations, including its use of facial-recognition technology, and would be required to provide additional user protections.
The proposal marks the third time the FTC has taken action against the company for failing to protect users’ privacy.
FTC Commissioner Alvaro Bedoya questioned the agency’s authority to restrict the monetization of kids’ data, saying the connection between the company’s actions and the penalty wasn’t clear.
Mr. Bedoya said: “There are limits to the Commission’s order modification authority.”
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The proposal comes after Meta opened its Horizon Worlds metaverse to teens.
The FTC has asked Meta to respond to allegations that from late 2017 until mid-2019, Facebook misrepresented that parents could control whom their children communicated with through its Messenger Kids product.
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The agency also said an independent third-party assessor, empowered to oversee the company’s privacy protections under the 2020 order, identified several gaps and weaknesses in Facebook’s privacy program.
The proposed changes to the 2020 order, which would apply to Facebook and Meta’s other services such as Instagram, WhatsApp, and Oculus, include a blanket prohibition against monetizing data of children and teens under 18.
The FTC also wants the company to pause launching new products and services unless it receives written confirmation from the independent assessor that its privacy program is in full compliance with privacy protections.
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