Topline
The Federal Trade Commission voted unanimously to fine the company behind popular anonymous messaging app NGL and its founders $5 million in a settlement resolving a lawsuit against the company, which also bans the app from hosting minors on its platform, in a first-of-its kind ruling that reflects the FTC’s undertaking to protect children while they use technology.
The FTC voted unanimously to ban anonymous messaging app NGL from serving minors on its platform. ... [+]
Key Facts
The lawsuit from the FTC and the Los Angeles District Attorney’s Office said that NGL Labs, the company behind anonymous messaging app NGL, unfairly marketed the app to children and teens, misled users into purchasing premium accounts and made false claims about the effectiveness of their AI moderation tool meant to deter cyberbullying.
The app sent fake messages to users with intentionally enticing content like “are you straight?” and “I know what you did,” according to the suit, to encourage them to pay for a premium service that would apparently reveal the identity of the sender, though the FTC complaint said that no names were revealed after the user purchased the $9.99 a week subscription.
The ban restricting NGL from serving minors is the first of its kind for the FTC, which may lay ground for further regulations as the commission works to strengthen children’s privacy protections.
NGL co-founder Joao Figueiredo in a statement to The Washington Post said the company believes “many of the allegations around the youth of our user base are factually incorrect” but called the settlement “an opportunity to make NGL better than ever.”
Big Number
At least 200 million. That’s how many total global downloads the app claims to have.
Key Background
FTC chair Lina Khan has long been outspoken on the regulation of artificial intelligence and technology, writing in a guest essay for The New York Times that she aims to regulate companies using AI “without tolerating business models or practices involving the mass exploitation of their users.” The FTC has also been active in restricting the use of children’s data without parental consent, last year charging Microsoft $20 million for collecting personal information of children through its Xbox gaming system. The commission is embroiled in legal challenges with Meta, which contested the constitutionality of the FTC’s proposed new restrictions for the company prohibiting its monetization of youth data.
Crucial Quote
“The consequences of these actions can be severe. The anonymity provided by the app can facilitate rampant cyberbullying among teens, causing untold harm to our young people,” Los Angeles District Attorney George Gascón said Tuesday. “We cannot tolerate such behavior, nor can we allow companies to profit at the expense of our children’s safety and well-being.”
