The Federal Trade Commission (FTC) has prohibited the anonymous messaging app NGL from serving users under 18, marking the first instance of the agency ordering a digital platform to cease operations for minors.
In a lawsuit brought by the FTC and the Los Angeles County District Attorney's office, NGL was accused of deceptively marketing to children and falsely claiming its AI-powered content moderation system could prevent cyberbullying.
The app was also alleged to have engaged in deceptive practices related to its premium subscription plan, NGL Pro, according to Forbes.
NGL Labs, the owner of NGL, along with app co-founders Raj Vir and Joao Figueiredo, reached a settlement with the FTC and the DA's office, as announced on Tuesday.
As part of the agreement, NGL will implement an age restriction and pay $5 million.
"After nearly two years of cooperating with the FTC's investigation, we view this resolution as an opportunity to make NGL better than ever for our users and we think the agreement is in our best interest," Figueiredo stated in an email.
"While we believe many of the allegations around the youth of our user base are factually incorrect, we anticipate that the agreed upon age-gating and other procedures will now provide direction for others in our space, and hopefully improve policies generally."
NGL, which launched in 2021 and is based in California, became popular among teens for allowing users to post anonymous questions on their social media platforms. However, reports from NBC News revealed that slurs and harassment were able to bypass the app's language filters.
"NGL marketed its app to kids and teens despite knowing that it was exposing them to cyberbullying and harassment," FTC Chair Lina M. Khan said.
The complaint against NGL also accused the app of sending fake messages to drive engagement, with many users finding these messages harassing.
NGL also allegedly misled users into subscribing to NGL Pro under the pretense that it would reveal the identities of anonymous message senders, which it did not fully do, instead providing "hints" like phone models and approximate locations.
The FTC and the DA's office described this as a "bait-and-switch tactic."
They said many consumers were unaware that NGL Pro, costing up to $9.99 per week, was a recurring charge, violating the Restore Online Shoppers' Confidence Act, which requires clear disclosure of transaction terms and informed consent for charges.
Of the $5 million settlement, $4.5 million will go towards consumer redress, while $500,000 will be paid as a civil penalty to the DA's office.
