US federal judge allows FTC to limit Meta profiting off of children, tighten the screw on Zuckerberg

Meta Platforms, the parent company of popular platforms like WhatsApp, Instagram, and Facebook, suffered a setback as a federal judge ruled against its motion to take over a dispute with the US Federal Trade Commission (FTC). The ruling allows the FTC to pursue changes to the 2019 settlement with Meta, where the company agreed to pay a $5 billion fine.

In May, the FTC accused Meta of misleading parents about the level of control they had over their children’s interactions on the Messenger Kids app.

The proposed changes to the settlement include preventing Meta from profiting off data collected from users under the age of 18, extending limitations on facial recognition technology, and imposing restrictions on its virtual reality business.

Meta, which relies on digital ads targeted using personal data for more than 98 per cent of its income, has been in a competitive struggle with short video app TikTok for the attention of young users.

The FTC argues that it has the authority to decide on changes to settlements and that the district court lacks jurisdiction in this matter. The court’s decision can be appealed to the relevant appeals court.

In response, Meta stated that the FTC’s allegations regarding children and privacy were “without merit” and mentioned considering legal options while vowing to vigorously contest the FTC’s attempt to unilaterally amend the agreement.

The FTC has settled with Facebook (now Meta) twice before over privacy violations, with the most recent settlement in 2019 involving the $5 billion fine.

The regulatory agency has been pushing for further changes, including potential divestiture of acquisitions like Instagram and WhatsApp. The latest ruling allows the FTC to proceed with seeking modifications to the existing settlement, marking an ongoing regulatory challenge for Meta Platforms.

(With input from agencies)