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US government investigating how 9 social media companies collect and use data

The Federal Trade Commission, which enforces US antitrust and consumer protection laws, has issued orders to nine social media companies demanding information about how and for what purposes they collect and store user data. The FTC is also wants to know about the companies’ advertising and user engagement practices, specifically as they relate to child and adolescent users.

The list of targeted companies is a rogues gallery of digital malefactors: Amazon, ByteDance (owner of TikTok), Discord, Facebook, Reddit, Snap, Twitter, WhatsApp, and YouTube. They have 45 days to respond to the order. I’m not sure, but I don’t believe that any of them have 1300 numbers.

On its webpage, the FTC writes that the objective is to gain a fuller understanding of:

  • how social media and video streaming services collect, use, track, estimate, or derive personal and demographic information;
  • how they determine which ads and other content are shown to consumers;
  • whether they apply algorithms or data analytics to personal information;
  • how they measure, promote, and research user engagement; and
  • how their practices affect children and teens.

“The FTC wants to understand how business models influence what Americans hear and see, with whom they talk, and what information they share,” explained the FTC in a press statement. “And the FTC wants to better understand the financial incentives of social media and video streaming services.”

As CNBC reports, there’s a clause in the FTC Act that enables the FTC to conduct wide-reaching probes that are separate from law enforcement. These are known as “6(b) studies.” The FTC carried one out earlier this year in which it reviewed various takeovers by some of the major US monopolies, namely, Alphabet (Google), Amazon, Apple, Facebook and Microsoft.

Of course, Bill Gates’ Microsoft was the subject of a major antitrust lawsuit in 2001. In that case, Microsoft was confirmed as a corporate outlaw operating in violation of the Sherman Antitrust Act of 1890. Now Facebook finds itself faced with a similar lawsuit filed just this month by the FTC along with 48 attorneys general. In that suit, Facebook is alleged to have taken over Instagram and WhatsApp after determining that, if left alone, they could pose a threat to Facebook’s hegemony.

Thus, Facebook is accused of unlawfully crushing competition and subsequently harming consumers by limiting their range of options, particularly with regard to privacy. Facebook plans to use the fact that the FTC approved its takeovers of Instagram and WhatsApp as the main pillar of its defense.