In a blow to Meta Platforms, the parent company of WhatsApp, Instagram, and Facebook, a federal judge ruled on Monday against the tech giant in an ongoing court battle over privacy concerns. The decision allows the U.S. Federal Trade Commission (FTC) to pursue measures aimed at reducing the financial gains Meta makes from users under the age of 18.
Judge Timothy Kelly of the U.S. District Court for the District of Columbia dismissed Meta’s motion, denying the company’s request for the court to take control of the dispute with the FTC. The ruling comes in the wake of allegations made by the FTC in May, accusing Meta of misleading parents regarding the extent of control they had over their children’s interactions on the Messenger Kids app, among other privacy-related issues.
The FTC proposed modifications to a 2019 settlement that originally required Facebook (now Meta) to pay a $5 billion fine. The suggested changes include preventing Meta from profiting from data collected on users under the age of 18, encompassing its virtual reality business. Additionally, Meta would face expanded restrictions on the use of facial recognition technology.
Meta, heavily reliant on digital ads targeted using personal data, faces a substantial threat to its revenue stream. Over 98% of the company’s income is generated through this advertising model. The court battle unfolds amid fierce competition with the short video app TikTok for the attention of young users.
A study conducted in early 2023 by the Pew Research Center revealed that 62% of teenagers aged 13-17 reported using Instagram, with 17% using WhatsApp. The findings underscore the significance of the dispute, given Meta’s reliance on young user engagement for its various platforms.
The FTC has contended that the authority to decide on settlement modifications lies within the agency’s purview and that the district court lacks jurisdiction in this matter. While the decision is a setback for Meta, the company may choose to appeal the ruling to the relevant appeals court, prolonging the legal battle over privacy concerns and regulatory oversight.