WASHINGTON (Reuters) – Lawyers representing Meta, the parent company of Facebook, Instagram, and WhatsApp, clashed with the U.S. government on Tuesday over the U.S. Federal Trade Commission’s (FTC) proposal to strengthen a 2019 privacy order.
In May, the FTC accused Meta of deceiving parents about the level of control they had over their children’s interactions in the Messenger Kids app, among other issues. The FTC suggested an amendment to the existing privacy agreement, which would include a prohibition on leveraging minors’ data for financial gain.
James Rouhandeh, representing Meta, argued before Judge Timothy Kelly of the U.S. District Court for the District of Columbia that the court had jurisdiction to handle the case and should dismiss the FTC’s proposal since Meta had not consented to it.
“They (the FTC) do need consent to modify. Because this is a contract, they need consent to modify (it),” Rouhandeh stated.
Zachary Cowan, representing the FTC, countered that it was within the agency’s authority to determine whether adjustments should be made to their settlements, and the district court did not have jurisdiction in this matter.
Judge Kelly, expressing skepticism towards Meta’s jurisdiction arguments, stated that he would likely make a ruling prior to November 30th.
The core dispute revolves around whether Meta and the FTC, if they fail to reach a settlement, will have the decision on modifying the 2019 agreement made by a district court or an FTC judge.
The FTC’s proposed amendments include forbidding Facebook from profiting off users under the age of 18, which includes its virtual reality business. Additionally, Facebook would face stricter restrictions on utilizing facial recognition technology.
Meta relies heavily on targeted digital advertisements, which utilize personal data, for over 98% of its revenue. The company is currently competing with the popular short video app, TikTok, for the attention of young users.
The FTC previously settled with Facebook twice for privacy violations; first in 2012, and then in 2019 when Facebook agreed to pay a record $5 billion fine for misleading users about their control over personal data. The consent order was finalized in 2020.
In 2020, the FTC also sought a court order to require Facebook to divest Instagram, which was acquired for $1 billion in 2012, and WhatsApp, acquired for $19 billion in 2014. The case has yet to proceed to trial.
(Reporting by Diane Bartz; Editing by Marguerita Choy)
