A Federal Trade Commission (FTC) staff report has found that social media and video streaming companies have been engaging in widespread user surveillance, particularly of children and teens, with insufficient privacy protections and earning billions of dollars annually by monetizing their data.
The FTC's findings were released after a probe that began in December 2020 and started with 6(b) orders sent to Amazon (owner of Twitch), Meta (Facebook), YouTube, Twitter (now X Corp.), Snapchat, TikTok (owned by ByteDance), Discord, Reddit, and WhatsApp (Meta) four years ago, in December 2020.
The report is based on an investigation into the companies' data collection methods, how they track personal and demographic information, and the impact of these practices on minors from 2019 to 2020. As the FTC revealed today, the results raise significant concerns about data retention, sharing practices, and targeted advertising.
FTC Chair Lina M. Khan further underscored the gravity of these findings today, saying the report reveals how these companies monetize an "enormous amount of Americans' personal data," earning billions of dollars annually.
"While lucrative for the companies, these surveillance practices can endanger people's privacy, threaten their freedoms, and expose them to a host of harms, from identify theft to stalking," Khan said. "Several firms' failure to adequately protect kids and teens online is especially troubling."
The FTC says the platforms collected massive amounts of data, most of which was retained indefinitely. Several companies engaged in broad data sharing, often with inadequate oversight, failed to delete all user data even after the users requested it.
The companies' business models also encourage the mass collection of user data to drive targeted advertising, which generates most of their revenue. As the reports noted, this approach directly conflicts with user privacy and increases the risk of misuse of personal information.
The report also highlighted how social media and video streaming platforms fed user and non-user data into algorithms and artificial intelligence systems, often without allowing users to opt out, raising further concerns about transparency, oversight, and potential consumer harm.
One of the report's most significant findings was the lack of protections for children and teens on these platforms, with many companies saying "that there are no children on their platforms because their services were not directed to children," seemingly in an attempt to avoid compliance with the Children's Online Privacy Protection Act (COPPA).
However, the FTC's report found that teens were often treated the same as adults on these platforms, with few, if any, additional safeguards.
The FTC staff report urges policymakers to take action, calling for Congress to pass comprehensive federal privacy legislation, including limits on data collection, stricter data minimization and retention policies, and more transparent and consumer-friendly privacy policies.
It also asks companies to enhance protections for teens and children on their platforms, treating COPPA as a baseline and offering additional safety and privacy protection measures.
"The Report's findings are timely, particularly as state and federal policymakers consider legislation to protect people from abusive data practices," Khan added.