The new terms of the settlement, which still need to be approved by a judge, are the FTC’s latest effort to crack down on companies that violate or harm children’s privacy. The commission has filed several complaints under the Children’s Online Privacy Protection Act (COPPA), including against Fortnite-creator of Epic games, Microsoft’s Xboxand one Weight Watchers weight loss app marketed to childrenBut prohibiting a company from offering its app to children makes this deal unique.
NGL is an application where users can solicit anonymous messages or questions from their peers. Google Play Store PageIt encourages users to share their NGL link in their Instagram bio “to get even more messages.” The FTC and the Los Angeles District Attorney’s Office have accused NGL and its two co-founders of tricking young users into signing up for the paid version of the service by sending fake messages that appeared to be from real people and falsely promising that payment would reveal the senders’ identities. But when users signed up for as much as $9.99 a week, they received only “hints” as to the senders’ identities, the complaint alleges. NGL’s product manager allegedly wrote “Lol suckers” in a text message with the company’s co-founders in response to a customer complaint that the paid version didn’t actually show who sent some messages.
According to the regulators’ complaint, NGL also falsely claimed it could filter out cyberbullying and other harmful messages through artificial intelligence-based content moderation tools. It allegedly marketed the app as a “fun but safe place” for “young people… to share their feelings without judgment from friends or social pressures” and disputed Apple’s suggestion that the app should not be rated for people over 12. But in reality, the complaint says, cyberbullying was “rampant” on the service, and the company reportedly received consumer complaints about self-harm and suicide attempts that users attributed to experiences on the NGL app.
The app also allegedly violated COPPA by failing to seek parental consent for children under 13 on the service or honor their requests to delete their children’s data. In addition to the age-restriction requirements, NGL has agreed to pay $5 million to settle the charges.
“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 believe the agreement is in our best interest,” NGL co-founder Joao Figueiredo said in a statement. “While we believe many of the allegations regarding the youth of our user base are factually incorrect, we anticipate that the age-screening and other procedures agreed upon will now provide guidance to others in our industry and hopefully improve policies overall.”
The commissioners voted 5-0 to file the complaint and issue the settlement order. But both Republican commissioners made clear that they believe Section 5 of the FTC Act, which prohibits deceptive marketing practices, cannot necessarily be used against any anonymous messaging app marketed to children. In a concordant statementRepublican Commissioner Andrew Ferguson wrote that he supported the complaint against NGL and believed that the app’s “alleged conduct, tailor-made to manipulate the vulnerable psyche of adolescents, was reprehensible and unfair.” But, he added, “it does not follow that Section 5 categorically prohibits the marketing of any anonymous messaging app to adolescents.” Fellow Republican Commissioner Melissa Holyoak joined the statement.
The Republican commissioners’ statement is significant at a time when states across the country are passing laws aimed at limiting the age of certain parts of the Internet. The Supreme Court recently agreed to take on a case involving a Texas age verification law. Ferguson warned that interpreting a law that outright bans anonymous messaging services for minors “would create serious constitutional problems.” He added that there were “real benefits” to allowing teens to remain anonymous online, including protecting them from the “crowd” of cancel culture. He also said Holyoak “rightly observes that this can be used to encourage at-risk teens to seek help that they would not otherwise feel comfortable seeking.”
