Major Report Unveils Alarming Practices by Social Media Giants, Calls for Action

Finger tapping social media app icons on a smartphone.

The Federal Trade Commission (FTC) unveils alarming data exploitation practices by major social media platforms, calling for immediate federal action to protect consumer privacy.

At a Glance

FTC report exposes widespread surveillance of users, including minors, by Meta, YouTube, and TikTok
Companies collected and shared more personal information than users realized
Consumers lost $2.7 billion to social media scams since 2021
FTC urges federal privacy legislation to protect consumer rights

FTC Uncovers Extensive User Surveillance

The Federal Trade Commission has released a comprehensive report revealing troubling practices by major social media and streaming services. The study, which began nearly four years ago, found that platforms such as Meta, YouTube, and TikTok engaged in extensive surveillance of their users, including minors. These companies collected and shared more personal information than most users were aware of, raising serious privacy concerns.

The investigation involved nine companies and uncovered that these platforms profited from user data by leveraging it for targeted advertising based on user demographics. Alarmingly, the FTC found that these tech giants failed to adequately protect users, especially children and teens, from potential harm resulting from this data exploitation.

Calls for Federal Privacy Legislation

In light of these findings, the FTC is strongly advocating for federal privacy legislation and restrictions on data collection and usage. FTC Chair Lina Khan emphasized the gravity of the situation, stating the potential dangers of unchecked data practices.

“Surveillance practices can endanger people’s privacy, threaten their freedoms, and expose them to a host of harms, from identity theft to stalking,” said Lina Kahn, the F.T.C.’s chair, in a statement.

The report underscores the historical inability of these tech giants to self-regulate effectively, highlighting the urgent need for stronger regulatory measures to ensure consumer protection. This call to action comes at a critical time when the digital landscape continues to evolve rapidly, outpacing current regulatory frameworks.

FTC Takes Action Against Misleading Ads and Scams

In response to the surge in online fraud, the FTC has issued 6(b) orders to several platforms, including Meta, TikTok, YouTube, and Twitter. These orders seek information on how these platforms screen for misleading ads related to scams and fraudulent products. The Commission’s proactive stance comes in the wake of alarming statistics revealing that consumers reported over $1.2 billion in losses due to social media fraud in 2022 alone.

“Social media has been a gold mine for scammers who tout sham products and other scams that have cost consumers enormously in recent years,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This study will help the FTC ensure that social media and video streaming companies are doing everything they can to keep scammers and deceptive ads off their platforms.”

The FTC’s investigation aims to understand the companies’ standards and policies for paid advertisements, including both human and automated review processes. The orders require companies to report ad revenue, ad views, and performance metrics, with a particular focus on ads prone to deception.

Protecting Consumers in the Digital Age

As part of its mandate to protect consumers, the FTC is broadening its investigation to examine the prevalence of deceptive advertising, its impact on consumers, and the effectiveness of platform oversight. The Commission is also exploring how platforms create, track, and classify ads, including the use of emerging technologies like generative AI and new ad formats such as shoppable ads and virtual reality ads.

The scope of the FTC’s orders covers the calendar years 2019 through 2023, allowing for a comprehensive study of business conduct since the onset of the COVID-19 pandemic. This wide-ranging approach, enabled by the FTC’s 6(b) authority, allows for thorough investigation without a specific law enforcement purpose, ensuring a holistic understanding of the digital advertising landscape.

As the digital world continues to evolve, the FTC’s efforts to safeguard consumer interests in the face of sophisticated data exploitation practices by tech giants remain crucial. The findings of this report and subsequent actions may shape the future of digital privacy and consumer protection in America.