 "The FTC report also shed light on the business models of these companies, which were found to incentivise the mass collection of data from users, and in some cases, non-users. This data was often monetised through targeted advertising. Image Credit: Reuters")
The US Federal Trade Commission (FTC) has released a staff report accusing nine major social media and video streaming companies, including Tiktok, Meta and X (formerly Twitter), of engaging in extensive surveillance of consumers to monetise their personal data.
The report, which was made public on Thursday, suggests that these companies have been exploiting user information without providing adequate protection, particularly for minors.
Inadequate data protection
The FTC’s findings reveal that not only did these companies collect and monetise vast amounts of personal data, but their practices for data collection, minimisation, and retention were found to be “woefully inadequate.”
This lack of proper safeguards has left consumers vulnerable to various risks, including identity theft and stalking. The report also emphasised that the failure to protect children and teenagers online is particularly concerning, as these platforms did not implement different privacy measures for users under 18 compared to adults.
The study, which began nearly four years ago, was based on responses from orders issued in December 2020 to nine companies overseeing 13 social media and video streaming services. These orders requested detailed information on each company’s operations between 2019 and 2020.
The investigation highlighted that despite the companies claiming compliance with the Children’s Online Privacy Protection Act (COPPA), the protections offered were minimal, with significant lapses once a child turned 13.
Mass data collection motivated by profit
The FTC report also shed light on the business models of these companies, which were found to incentivise the mass collection of data from users, and in some cases, non-users. This data was often monetised through targeted advertising.
Impact Shorts
More ShortsThe study uncovered that some companies even purchased information from data brokers and third parties, including details about consumers’ offline activities, to enhance their user profiles. These profiles were then used to target specific consumer segments for advertisers.
The report pointed out that aside from one exception, most companies did not provide users with the option to opt in or out of having their data used in algorithms, data analytics, or artificial intelligence. This practice further demonstrates the prioritisation of profit over user privacy. Although some companies have since updated their policies under increasing scrutiny from state and federal regulators, the FTC remains critical of the industry’s self-regulation efforts.
Calling for legislative action
The FTC’s report concludes that self-regulation in the industry has largely been a failure, and stronger legislative measures are needed to protect consumers, especially teenagers. While the report makes several recommendations for companies and Congress, including the introduction of federal legislation to limit surveillance and extend protections to users over 13, it did not specify any immediate enforcement actions.
The report serves as a stern reminder of the growing need for comprehensive privacy laws to safeguard consumer data in an increasingly digital world.