Meta Platforms, Inc., the parent company of Facebook (NASDAQ:META), is embroiled in a legal dispute with the Federal Trade Commission (FTC) over the use of children's data for profit.
While the exploitation by Meta of children’s Facebook data is concerning, the company is continuing to argue its right to profit from said data.
Despite a recent court defeat, Meta has initiated legal action against the FTC, challenging the constitutional validity of the agency's authority to amend a 2020 settlement agreement that involved a US$5 billion fine over privacy concerns.
The lawsuit, lodged in the US District Court for the District of Columbia, specifically accuses FTC chairperson Lina Khan and other commissioners of overstepping their statutory powers.
This reaction comes after Meta faced allegations from the FTC of violating the 2020 privacy agreement. In May, the FTC suggested imposing restrictions on Meta's ability to monetise data from users under 18, a proposal contested by Meta.
Washington DC federal Judge Timothy Kelly, who had approved the original 2020 settlement, recently dismissed Meta's request for a new court ruling, further complicating the company's position.
Despite this setback, Meta maintains that the FTC's enforcement efforts lack merit and has appealed against the court's decision. The new lawsuit by Meta questions the FTC's overarching enforcement authority, claiming infringement of property rights and constitutional overreach.
Meta contends that the FTC's current actions exceed the mandate provided by the original Federal Trade Commission Act of 1914, alleging that the agency enjoys excessive authority.
The company is required to respond to the FTC's demands by December 11, following multiple allegations of breaching the terms of the 2020 settlement. The FTC's potential response could include prohibitions on Meta's use of facial recognition technology and restrictions on profiting from children's data.
Despite the ongoing dispute, Meta asserts it has complied with the FTC's requirements for more than a decade and invested significantly in privacy policy changes as per the 2020 agreement.
The company views the FTC's latest actions as an unwarranted expansion of power.
This legal battle comes in the wake of Meta's efforts to attract a younger audience to its Metaverse project, Horizon Worlds, which has drawn scrutiny from US senators and prompted the proposed order requiring third-party approval for new launches.