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The Federal Trade Commission is moving forward with an investigation into the business of social media and how it relates to consumers’ personal data.
The commissioners in a 4-to-1 vote on Monday approved a formal investigation into nine social media companies, with aims to sift out particulars on user personal data collection, how that data is housed, and how they use it to advertise, in addition to the influence their products and services have on children, according to an FTC statement on the order.
“Critical questions about business models, algorithms, and data collection and use have gone unanswered,” FTC Commissioner Rohit Chopra said in a statement.
The orders allow the FTC to investigate the following social media companies: Amazon, TikTok’s parent company ByteDance, Discord, Facebook, Reddit, Snapchat, Twitter, WhatsApp, and YouTube.
The FTC commissioners who voted to move forward with this order want to learn more about how these platforms “collect, use, track, estimate, or derive” personal data and demographic information.
They also want to know how these companies deliver ads to users by using algorithms on personal data.
Another component to this study will be to examine how all this technology and social media practices influence and affect children and teens.
The social media companies have 45 days to respond to the order. Bloomberg reports Amazon and Facebook have yet to comment on the news of the personal data investigation. Twitter and Reddit have been quoted as saying that they take user privacy and personal data seriously and are cooperating fully.
The moves to find out how our personal data is monetized comes amid a flurry of other actions by the federal and state government in the social media space.
Facebook is currently facing an antitrust lawsuit filed by 46 states claiming their monopoly is harmful, specifically accusing its personal data collection practices.
In October, the U.S. Justice Department filed a similar antitrust lawsuit against Google, according to CNET. At least 12 states have joined since. The legal move is on par with the Microsoft antitrust proceedings in the 1990s that ended up in a 2001 settlement, CNET reports.
The FTC isn’t the only one investigating social media companies, either. Seven attorneys general have been running “parallel investigations into Google’s anti competitive market behavior,” according to a statement posted by New York Attorney General Letitia James.
The opaque nature of social media practices is even the subject of consumer class action lawsuits against Facebook, Twitter, TikTok and others.
The FTC’s order to study how our personal data is handled “is a step toward getting much-needed clarity,” the FTC Commissioners who voted for it said. “It is alarming that we still know so little about companies that know so much about us.”
The commissioners say they not only want to “lift the hood on the social media and video streaming firms to carefully study their engines” with this inquiry but also examine the impact on children.
“The FTC wants to understand how business models influence what Americans hear and see, with whom they talk, and what information they share. The questions push to uncover how children and families are targeted and categorized. These questions also address whether we are being subjected to social engineering experiments,” the commissioners voting for the study said in a statement.
The lone dissenting vote came from FTC Commissioner Noah Phillips, who said the study’s scope is too broad and failed to include personal data use by social media companies like Apple, Parler and LinkedIn, among others.
“The actions undertaken today trade a real opportunity to use scarce government resources to advance public understanding of consumer data privacy practices—critical to informing ongoing policy discussions in the United States and internationally—for the appearance of action,” he said.
What do you think of the FTC’s move to investigate social media companies? Let us know in the comments below.
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