Facebook, YouTube and seven other tech platforms ordered to explain personal data usage by FTC
Move from the US regulator comes a week after lawsuit against Facebook and EU documents suggesting stiff fines for anticompetitive practices are leaked
The US Federal Trade Commission (FTC) announced on Monday that it has issued orders to nine social media and video streaming services seeking information about how they collect and use personal data from their users.
The new order affects Amazon, Facebook, WhatsApp, Reddit, Snap, Twitter, YouTube, ByteDance and Discord.
The FTC said it is specifically seeking information on:
- how social media platforms and video streaming services collect, use, track or derive consumer's personal and demographic details
- how they determine which ads should be shown to users
- how they measure and promote user engagement
- whether social media companies apply data analytics or algorithms to personal information
- how their advertising and data practices affect young, underage users
The companies have 45 days to respond from the date they receive the FTC's order.
FTC said four of its commissioners voted in favour of the order, while Commissioner Noah Joshua Phillips voted against it.
The latest move from the FTC comes just a week after the agency and 48 attorney generals across the US filed lawsuits against Facebook, accusing the company of abusing its market dominance to unlawfully maintain a monopoly in personal social networking services.
The lawsuit from the FTC alleged that Facebook bought WhatsApp and Instagram with intent to crush competition rather than creating their own services to compete against them.
In its lawsuit, the FTC also presented internal emails written by Facebook CEO Mark Zuckerberg, revealing how the company's senior executives perceived WhatsApp and Instagram as threats before the two platforms were acquired by Facebook.
"It is better to buy than compete," Zuckerberg wrote in a 2008 email, according to the lawsuit.
The FTC lawsuit is seeking the court to spin off Instagram and WhatsApp from Facebook.
Lawsuit against Facebook comes at the time when governmental agencies are increasingly showing intent to hold big tech firms accountable for their unlawful practices.
In October, Google was also hit with a lawsuit from the DOJ over its dominance in the search and online ad market. The government alleged that Google is spending billions of dollars to ensure that its search engine is the default choice on different browsers and phones.
Also this week, a leaked draft of European Union's proposed rules indicated that tech firms like Facebook, Google, Amazon and Apple could face fines up to six per cent of their annual turnover in Europe, if they abuse their market dominance to kill competition.
"The Commission may impose on the very large online platform concerned fines not exceeding 6 per cent of its total turnover in the preceding financial year where it finds that that platform, intentionally or negligently: (a) infringes the relevant provisions of this Regulation; (b) fails to comply with a decision ordering interim measures under Article 55; or (c) fails to comply with a voluntary measure made binding by a decision pursuant to Articles 56," the proposed text reads [pdf].
The EU Commission is set to present its long-awaited Digital Services Act (DSA) that proposes tougher rules for technology companies doing business in the 27 member states.
The DSA will update rules that were first adopted nearly 20 years ago, when most of the current big players in the tech sector were either very small or did not exist. The Act aims to set new rules on tech firms' responsibilities, particularly regarding their use of consumers' data and how they deal with illegal content on their platforms.