In a sweeping move that brings further attention to already intensely scrutinized social media companies, the Federal Trade Commission is launching an encompassing probe of social media firms' privacy policies. Specifically, the FTC is requiring companies to divulge how they collect and utilize user data.
The FTC has tapped nine different companies in its probe, including Amazon (NASDAQ: AMZN), ByteDance, Discord, Facebook (NASDAQ: FB), Reddit, Snap (NYSE: SNAP), Twitter (NASDAQ: TWTR), Facebook-owned WhatsApp, and Alphabet (NASDAQ: GOOGL) owned YouTube. Each company has 45 days to respond from the day they received their notice.
Specifically, the FTC is looking to understand how each company collects and uses personal information, how it is determined which ads and content are promoted to users, whether algorithms and analytics are used along with personal information, how user engagement is studied and measured, and how their practices affect minors.
"Critical questions about business models, algorithms, and data collection and use have gone unanswered. Policymakers and the public are in the dark about what social media and video streaming services do to capture and sell users' data and attention," said FTC Commissioners in a statement. "It is alarming that we still know so little about companies that know so much about us."
While there is currently no wrongdoing being used to motivate the probe, the probe's timing coincides with the FTC's own pending litigation with Facebook, and the Department of Justice's litigation against Alphabet. The sudden probe, coupled with the pending litigation, paints a picture of a rising precedent of stronger government oversight of tech firms and social media platforms. It is entirely possible that the FTC could be preparing for further litigation against major tech companies; it is also possible that the FTC's fact-finding mission could spur lawmakers on Capitol Hill to take their measures.
"Despite their central role in our daily lives, the decisions that prominent online platforms make...remain shrouded in secrecy. Critical questions about business models, algorithms, and data collection and use have gone unanswered," the FTC's commissioners said.