Data Harvesting and Inadequate Protection: FTC Slams Social Media Giants

The United States Federal Trade Commission (FTC) has released a new report examining the data collection and usage practices of major social networks and video platforms. According to the report, companies engage in extensive surveillance of users to monetize their personal information, while providing inadequate online protection, especially for children and adolescents.

The study is based on inquiries sent to nine of the largest social networks and video services in December 2020, including Amazon, Meta, YouTube, X, TikTok, Snap, Discord, Reddit, and WhatsApp. These companies were required to disclose how they collect and use personal data, and how their algorithms influence the selection of ads and content for users.

The report reveals that not only did companies amass vast amounts of data, but they could also retain it indefinitely. Some companies failed to delete data upon users’ requests, raising concerns about the proper oversight of data processing.

It was also found that companies used tracking pixels to display targeted advertising based on user preferences, which remains a primary revenue source. Such practices endanger user privacy.

The report emphasizes that companies’ automated systems, including algorithms and AI, actively exploit personal data. Meanwhile, users, including those not registered on the platforms, have little to no control over how their data is used. Moreover, standards for monitoring and testing these automated systems are often inconsistent and inadequate.

Particular attention is given to how social networks and video platforms handle the data of children and teenagers. Many companies claim their platforms are not designed for children. However, the FTC believes these statements are merely attempts to evade responsibility under the Children’s Online Privacy Protection Act (COPPA), as companies often fail to differentiate between teenagers and adults, imposing no specific restrictions on teen accounts.

The report also considers the competitive implications of data collection practices. Companies that accumulate large amounts of user information may gain a dominant market position, potentially leading to abuses such as prioritizing data collection at the expense of user privacy. Limited competition among social networks and video services reduces options for users and heightens the need for legislative regulation.

Based on its analysis, the FTC makes several recommendations for both companies and lawmakers. Congress is urged to pass federal privacy legislation that would limit mass surveillance and grant users greater control over their data. Companies are advised to reduce the volume of data collected, establish clear rules for data retention and minimization, and provide users with more control over their data.

Furthermore, companies must acknowledge the presence of children on their platforms and adopt additional safety measures to protect them beyond the minimum requirements set by COPPA. For teenagers, enhanced privacy protections should be implemented, recognizing that they are not adults and require special consideration.

The FTC report was unanimously supported by all five members of the commission.