Meta Platforms swings to decline as FTC moves to prohibit monetizing youth data
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Meta Platforms (NASDAQ:META) stock turned negative Wednesday as the Federal Trade Commission publicized proposed changes to its 2020 privacy order with Facebook, and alleged that the company failed to fully comply with the earlier order.
The FTC says Facebook misled parents about their ability to control contacts in the Messenger Kids app, and misrepresented access to private user data that it gave to some developers.
Meta stock turned from a gain to a 2% decline in response.
It's proposing changes to the order that would issue a blanket prohibition on Meta from profiting from data it collects (including in virtual reality) from users under 18.
It would also limit Meta's use of facial recognition technology and call for additional user protections, the agency said. New or modified products or services would need confirmation from an assessor that privacy programs are in full compliance.
âFacebook has repeatedly violated its privacy promises,â said the FTC's Samuel Levine. âThe companyâs recklessness has put young users at risk, and Facebook needs to answer for its failures.â
The 2020 order called for Meta -- then known as Facebook -- to pay a $5B civil penalty, among its other requirements.
It's the third time the FTC has taken action against Facebook on user privacy, the agency noted, following a first complaint in 2011.