FTC to study how major social media companies collect and process data

FTC to study how major social media companies collect and process data

FTC to study how major social media companies collect and process data

The U.S. Federal Trade Commission has ordered nine social media and video service companies, including Facebook, Amazon, YouTube, Twitter, WhatsApp, and Reddit, to share how they collect, use, and track personal data, how their practices affect children and teens, and how they determine which ads and other content are shown to consumers.

When issuing the order, the Federal Trade Commission said it is being issued to conduct a wide-ranging study without a specific law enforcement purpose. Nevertheless, Amazon. ByteDance Ltd, which owns and operates TikTok, Discord Inc., Facebook, Inc., Reddit, Inc., Snap Inc., Twitter, Inc., WhatsApp Inc., and YouTube have been directed to provide the requested information within 45 days.

Following are the details that the social media companies have been directed to share with the FTC:

  • how social media and video streaming services collect, use, track, estimate, or derive personal and demographic information;
  • how they determine which ads and other content are shown to consumers;
  • whether they apply algorithms or data analytics to personal information;
  • how they measure, promote, and research user engagement; and
  • how their practices affect children and teens.

Issuing a statement in support of the order, FTC Commissioners Rohit Chopra, Rebecca Kelly Slaughter, and Christine S. Wilson said the FTC wants to know how many users these big social media companies have, how active the users are, what the companies know about them, how they got that information, and what steps the companies take to continue to engage users.

“Never before has there been an industry capable of surveilling and monetizing so much of our personal lives. Social media and video streaming companies now follow users everywhere through apps on their always-present mobile devices. This constant access allows these firms to monitor where users go, the people with whom they interact, and what they are doing. But to what end? Is this surveillance used to build psychological profiles of users? Predict their behaviour? Manipulate experiences to generate ad sales? Promote content to capture attention or shape discourse? Too much about the industry remains dangerously opaque.

“These digital products may have launched with the simple goal of connecting people or fostering creativity. But, in the decades since, the industry model has shifted from supporting users’ activities to monetizing them. This transition has been fueled by the industry’s increasing intrusion into our private lives. Several social media and video streaming companies have been able to exploit their user-surveillance capabilities to achieve such significant financial gains that they are now among the most profitable companies in the world.

“Despite their central role in our daily lives, the decisions that prominent online platforms make regarding consumers and consumer data remain shrouded in secrecy. Critical questions about business models, algorithms, and data collection and use have gone unanswered. Policymakers and the public are in the dark about what social media and video streaming services do to capture and sell users’ data and attention. It is alarming that we still know so little about companies that know so much about us,” they said.

They added that by gaining an understanding of how social media companies collect and use personal data, how much surveillance do they conduct, how do they categorise children and families, how they make inferences about user attributes, interest, and interactions, and whether they conduct social engineering experiments, the FTC will be able to shape its policies and enforcement approaches.

“This study has been long in the making. Many stakeholders have affirmed its importance. We look forward to receiving critical information that will shed light on the business practices deeply embedded in our digital lives,” they said.

Even though the current order will not necessarily result in law enforcement action, it’s not that the FTC is averse to taking stringent action against social media companies. Last year, the FTC fined Facebook a massive $5 billion (£3.98 billion) for its role in the Cambridge Analytica scandal that compromised personal details of up to 87 million people, 70 million of whom were based in the United States.

“The FTC takes the allegations that the data of millions of people were used without proper authorisation very seriously. The allegations also highlight the limited rights Americans have to their data. Consumers need stronger protections for the digital age such as comprehensive data security and privacy laws, transparency and accountability for data brokers, and rights to and control over their data,” said FTC Commissioner Terrell McSweeny.

Copyright Lyonsdown Limited 2021

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