FTC says tech companies collect consumer data without ample protections

Major social media and video streaming companies are collecting data on their customers and selling it without adequately protecting users’ privacy, the Federal Trade Commission said in a report Thursday.

Children and teens were especially vulnerable to such practices, according to the FTC.

“Several firms’ failure to adequately protect kids and teens online is especially troubling,” Federal Trade Commission Chair Lina M. Khan said in a statement. “While lucrative for 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.”

Almost four years ago, the FTC ordered nine companies to provide data on how they collect, use and present personal information, as well as how they advertise and engage with their users, especially teens and children. The FTC report is based on responses from Amazon (owner of the gaming platform Twitch); Meta (formerly known as Facebook), YouTube, Twitter, Snap, ByteDance (owner of TikTok), Discord, Reddit and WhatsApp.

The report contends that the companies not only collected data about their users, and even non-users, but could keep it indefinitely. It also said many of the companies “engaged in broad data sharing” and that some of them did not delete user data even when it was requested.

It found users and non-users of the platforms had few, if any, ways to opt out of how their data was used.

“The FTC report’s intent and focus on consumers is an important step. However, the report lumps very different models into one bucket and paints a broad brush, which might confuse consumers and portray some platforms, like Discord, inaccurately,” Discord Head of U.S./Canada Public Policy Kate Sheerin told Spectrum News. 

Discord, she said, is “a real-time communications platform with strong user privacy controls and no feeds for endless scrolling. At the time of the study, Discord did not run a formal digital advertising service, which is a central pillar of the report.”

According to the FTC, many of the companies monetized data collection with targeted advertising; some of them used tracking technology to advertise to their users.

“We are disappointed with the FTC’s continued characterization of the digital advertising industry as engaged in ‘mass commercial surveillance,'” Interactive Advertising Bureau CEO David Cohen told Spectrum News. “This charged statement suggests that the personal data of consumers is covertly collected and used for advertising purposes.  Nothing could be further from the truth, as countless studies have shown that consumers understand the value exchange, and welcome the opportunity to have access to free or highly subsidized content and services.”

The FTC contends that many of the companies in its report treated teen users the same as adults, allowing them on the platform without restrictions. Some of the companies told the agency they did not have children on their platforms because they did not direct their services toward them or allow kids to create their own accounts.

The agency is calling on Congress to pass federal privacy legislation to address gaps in protections provided through the Children’s Online Privacy Protection Rule.

It also recommends companies limit data collection and develop enforceable policies to minimize how they retain it. It also advises they limit the data they share with third parties, delete the data they no longer need and provide more control to users. 

Spectrum News has also reached out to Amazon and Snap for comment. Snap said it did not have a formal response to the report.