The Federal Trade Commission on Wednesday accused Facebook, a unit of Meta Platforms, of violating the agency's 2020 privacy order and proposed new protections for children and teens. Meta stock dipped on the news.
As a sanction, the FTC proposed a blanket prohibition that would prevent Facebook from monetizing youth data.
The FTC said Facebook has misled parents about their ability to control with whom their children communicated through its Messenger Kids app. The social media network also misrepresented the access it provided some app developers to private user data, the agency said.
"Facebook has repeatedly violated its privacy promises," Samuel Levine, director of the FTC's Bureau of Consumer Protection, said in a news release. "The company's recklessness has put young users at risk, and Facebook needs to answer for its failures."
Meta Stock Shrugs Off FTC Action
On the stock market today, Meta stock declined o.9% to close at 237.03. Year to date, Meta stock is up 97%.
As part of the FTC's proposed changes, Meta would be prohibited from profiting from data it collects from users under the age of 18. Further, that would include Facebook, Instagram, WhatsApp and Meta's virtual-reality products, the agency said.
The announcement marks the third time the FTC has taken action against Facebook for allegedly failing to protect users' privacy.
The FTC gave Meta 30 days to respond to the agency's findings and its proposed changes. Meanwhile, Meta officials did not respond to a request from IBD for comment.
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Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
