Meta, which owns Facebook and Instagram, suffered a major setback after a US court rejected its appeal against the re-examination of possible privacy breaches, according to Reuters.
Meta’s appeal against the Federal Trade Commission (FTC) — the leading consumer protection watchdog in the US — was rejected on Friday by the Court of Appeals in Washington, DC. The regulator has accused Meta of misleading parents about the privacy of children on its popular social media platform, Facebook.
Meta had sought a delay against the FTC’s inquiry into the alleged privacy failures.
The blow comes after the same court denied Meta’s request in a similar case brought by the FTC last month (March, 21, 2024). The investigation, which was announced in 2023, stems from a 2020 settlement worth up to $5 billion, with the agreement including a range of privacy restrictions. Citing the penalty, Meta argued it had already settled the case for the given amount. The court, however, denied its appeal.
The current case surrounds allegations levelled by the FTC against Meta that the company profited from the data of underage users on Facebook. The agency seeks enforcement of stringent rules concerning the safety of minors’ data, including expanding restrictions on the facial recognition technology.
The Facebook-owner took the FTC to court in November last year, denying the accusations of misleading parents with regards to privacy risks. The court, however, has ruled Meta “has not satisfied the stringent requirement” for its appeal. “None has a likelihood of success” the court remarked, referring to five constitutional challenges put forth by Meta against FTC’s authority to act as an investigative and adjudicative entity.
There has been no comment on the ruling from Meta so far.
The $5 billion settlement in 2020 was hailed as an unprecedented regulatory action; however, some Big Tech critics saw it as a strategic attempt to dodge accountability and transparency. The settlement entailed a series of requirements for Meta regarding the privacy of its users and the level of control they had over their personal information.
“Following a yearlong investigation by the FTC, the Department of Justice will file a complaint on behalf of the Commission alleging that Facebook repeatedly used deceptive disclosures and settings to undermine users’ privacy preferences in violation of its 2012 FTC order,” read the 2020 settlement. “These tactics allowed the company to share users’ personal information with third-party apps that were downloaded by the user’s Facebook ‘friends.’”
Many users were unaware that Facebook was sharing their information, and therefore did not take the steps needed to opt out of data sharing, the statement added.
