The US Federal Trade Commission (FTC) voted Monday 14-12-20, to issue an order requiring nine major social media and video streaming companies to report on their use of consumer data. The order reads
“To compile data concerning the privacy policies, procedures, and practices of Social Media and Video Streaming Service providers, including the method and manner in which they collect, use, store, and disclose information about users and their devices, pursuant to Section 6(b) of the Federal Trade Commission Act, 15 U.S.C. § 46(b).”
The order, issued pursuant to section 6(b) of the FTC Act, requests information pertaining to five subjects: 1) the collection of consumer data, 2) the use of data to inform targeted advertising, 3) the application of algorithms or data analytics to personal information, 4) the promotion of user engagement, and 5) the effects of the above practices on children and teens.
The FTC’s majority statement emphasizes concerns as to the categorization and targeting of users as a result of data collection by social media and video streaming services. Data collected from online platforms are typically used to facilitate targeted advertising. However, once collected, user information can also be sold to other private firms and governmental entities.
Noah Joshua Phillips, who voted against the order, cited the unstructured nature of the investigation as the basis of his decision. He also noted that the investigation does not extend to all major video streaming companies, with Apple being one notable absence.
The power to direct sharing of this information is also quite elaborate as it gives the authorities use of all means necessary to make sharing of this information mandatory.
“The Federal Trade Commission hereby resolves and directs that any and all compulsory processes available to it be used with this inquiry. The Federal Trade Commission specifically authorizes the filing or continuation of actions to enforce any such compulsory process after the expiration of the three-year period”
The order is being sent to nine companies: Amazon.com, Inc., ByteDance Ltd. (which operates the video service TikTok), Discord Inc., Facebook, Inc., Reddit, Inc., Snap Inc., Twitter, Inc., WhatsApp Inc., and YouTube LLC. Several of these firms or their parent companies are also being investigated by federal and state authorities for antitrust violations, most notably Facebook and Google.
Companies will have 45 days from the day they receive the order to respond. See the resolution.