The privacy practices of nine major technology companies, including Amazon (AMZN) Alphabet’s YouTube (GOOG) (GOOGL), and Facebook (FB), are being scrutinized by the Federal Trade Commission.
The FTC voted 4-1 to issue orders on Monday to those three companies, along with ByteDance’s TikTok, online gaming communication company Discord, Reddit, Snap (SNAP), Twitter, (TWTR), and Facebook’s WhatsApp., to hand over wide-ranging data on how they collect, use, and present personal information.
The FTC directed the companies to provide data on their advertising and user engagement practices, and how their practices affect children and teens.
“Despite their central role in our daily lives, the decisions that prominent online platforms make regarding consumers and consumer data remain shrouded in secrecy,” stated a December 4 letter from a bipartisan group of FTC commissioners including Democrat Rohit Chopra, Democrat Rebecca Kelly Slaughter, and Republican Christine Wilson.
That letter added: “Critical questions about business models, algorithms, and data collection and use have gone unanswered. Policymakers and the public are in the dark about what social media and video streaming services do to capture and sell users’ data and attention. It is alarming that we still know so little about companies that know so much about us.”
Specifically, the agency said it wants information related to how social media and video streaming services collect, use, track, estimate, or derive personal and demographic information, and how the companies determine which ads and content consumers see. The FTC wants to know whether the companies apply algorithms or data analytics to personal information, and the impact of such efforts.
The FTC asked the social media and video streaming services to illustrate, in detail, how they utilize demographic information collected on age, country, and whether a user is of Hispanic, Latino, or Spanish origin. The FTC asked them to share the inputs and methodology for assessing their services’ reach, as well as to identify the top 1,000 most populous attributes that make a user valuable to their platform.
“We’re working, as we always do, to ensure the FTC has the information it needs to understand how Twitter operates its services,” a Twitters spokesperson said Monday.
A spokesperson from Discord told Yahoo Finance that the company takes user privacy very seriously and looks forward to working with the FTC to answer its questions.
“Importantly, there are no ads on Discord,” a spokesperson for the company said in an email. “We make no money from advertising, selling user data to advertisers, or sharing users’ personal information with others. Instead, the company generates its revenue directly from users through a paid subscription service called Nitro.”
Yahoo Finance reached out to the other companies targeted by the FTC and will update this article with any responses received.
The latest FTC action involving Facebook
Separately, on Wednesday, the FTC and a group of 48 U.S. attorneys general filed antitrust lawsuits against Facebook accusing it of operating an illegal monopoly by buying up competitors and depriving consumers of alternatives that would better protect their privacy. At the heart of both lawsuits are claims that Facebook’s acquisitions of Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion, as well as other smaller technology companies, were carried out in order to quash competition. As part of its lawsuit, FTC asked the court to force Facebook to divest Instagram and WhatsApp.
Facebook’s general counsel, Jennifer Newstead, on Wednesday called the FTC’s lawsuit “revisionist history,” noting that the commission approved the acquisition of both WhatsApp and Instagram.
“The government now wants a do-over, sending a chilling warning to American business that no sale is ever final,” she said in a prepared statement.
In 2019, the FTC slapped the social media company with a $5 billion penalty for allowing Cambridge Analytica, a data firm conducting election research on behalf of then candidate Donald Trump’s campaign, to access private data of 87 million Facebook account holders. In a settlement agreement the agency also mandated that Facebook implement new privacy safeguards, including third party access to user information.
The companies have 45 days from the date they receive the request to file a responsive report that includes the information requested.
Alexis Keenan is a legal reporter for Yahoo Finance and former litigation attorney. Follow Alexis Keenan on Twitter @alexiskweed.
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