FTC Seeks Stricter Social Media Data Oversight
The Federal Trade Commission (FTC) has called for stricter regulation of how social media companies collect user data. After investigating the data practices of major social apps, the FTC found numerous questionable practices.
A new report examined the data gathering processes of Twitch, Facebook, YouTube, X, Snapchat, TikTok, Discord, Reddit, and WhatsApp. It concluded that most social media companies engage in "vast surveillance of consumers" to monetize their personal information while failing to adequately protect users online, especially children and teens.
How Social Media Companies Collect and Use Data
The 129-page review examines how social platforms collect user data, both from users and non-users. It also explores how platforms use this data to power their various elements.
The report found that users and non-users have little to no way to opt out of how their data is used, particularly by automated systems, including for algorithmic and AI training.
FTC Chair Lina Khan stated, "The report lays out how social media and video streaming companies harvest an enormous amount of Americans’ personal data and monetize it to the tune of billions of dollars a year. While lucrative for the companies, these surveillance practices can endanger people’s privacy, threaten their freedoms, and expose them to a host of harms, from identity theft to stalking."
FTC Recommendations
Based on its findings, the FTC recommends that Congress pass enhanced privacy legislation to limit surveillance and enhance protections for users. The FTC is also calling on Congress to pass federal privacy legislation to "fill the gap in privacy protections provided by COPPA for teens over the age of 13."
The process could eventually lead to the U.S. implementing EU-style advanced protections for users, which restrict data collection and require more explicit consent on personal data use.
The Impact of the Digital Services Act (DSA)
The EU has implemented various new tracking and permission measures under its Digital Services Act (DSA). However, it's unclear whether this has significantly improved the data access and usage environment in the region. Apps now have to provide more information and seek approval from users for data usage. But it's not clear whether this has led to a reduction in data usage, as many people don't take the time to consider the implications of such consent.
The DSA has implemented more restrictions for younger users, which is a key focus of the FTC examination and could end up being the most impactful aspect.
What's Next?
It will be interesting to see how Congress responds to this report and whether it seeks to push for enhanced regulations and restrictions. At the same time, you can bet that the platforms will be deploying their lobbyists in Washington to oppose any further change.
Meta, in particular, now has a small army of political lobbyists seeking to influence policy, which could ensure that any FTC push for more restrictions is curtailed to some degree.
Either way, it's a new challenge for social apps, especially as they look to utilize more user data for AI training.
