Big tech is acting more like Big Brother.
That's according to the latest report from the Federal Trade Commission (FTC). The Thursday release details how major social media and video streaming platforms have taken snooping to a whole new level.
"The report lays out how social media and video streaming companies harvest an enormous amount of Americans' personal data and monetize it to the tune of billions of dollars a year," said FTC Chair Lina Khan in a statement Thursday. "While lucrative for the companies, these surveillance practices can endanger people's privacy, threaten their freedoms, and expose them to a host of harms, from identity theft to stalking."
The FTC mentions nine companies specifically:
- Amazon.com Inc's (NASDAQ: AMZN) Twitch
- Meta Platforms' (NASDAQ: META) Facebook
- Alphabet Inc's (NASDAQ: GOOG) (NASDAQ: GOOGL) YouTube
- X.com, formerly Twitter
- ByteDance Ltd., which owns the video-sharing platform TikTok
- Discord Inc.
- Reddit, Inc. (NYSE: RDDT)
- WhatsApp Inc. (also owned by Meta)
- Snap Inc. (NYSE: SNAP)
"Several firms' failure to adequately protect kids and teens online is especially troubling," Khan added, calling the report's findings "timely," particularly as policymakers consider legislation to protect people from "abusive data practices."
Unchecked Data Collection And Sharing
In 2020, the FTC issued orders to the nine social media and video streaming companies, requiring them to provide data on how they collect, use and present personal information.
What regulators found was that the platforms collected massive amounts of personal data, including from data brokers, not only from users but also from non-users. The data then fuels automated systems for targeted advertising and algorithmic content delivery.
The agency flagged these companies for a lack of transparency and making little effort to inform users or allow them to opt out of data collection. In some cases, the companies failed to delete user data even when requested, raising further concerns about data retention and privacy rights, the report continued.
The FTC found that companies employed privacy-invasive technologies, such as tracking pixels, to monitor users' behavior and serve personalized ads. These advertising models are the backbone of their businesses, often in direct conflict with user privacy. Companies also shared collected data broadly with third parties, amplifying the risk of misuse.
The report reveals social media and streaming platforms failed to protect younger users.
Companies either claimed there were no children on their platforms or their services weren't designed for minors. The FTC slammed it as an attempt to bypass regulations like the Children's Online Privacy Protection Act (COPPA).
However, the report highlights many platforms treat teens similarly to adults, without implementing additional safety measures or privacy protections for these vulnerable users.
The report wasn't without its critics, including those from within the FTC.
Commissioner Andrew Ferguson, for example, voted to approve the publication of the report but argues it "should have focused more on proposing legislative improvements to the online rights of parents and children rather than accusing companies of violating existing law under novel, dubious theories."
Ferguson argued against the claim that consumers can suffer "extreme harm" by being shown a targeted advertisement. He called it "a gratuitous attack on the online economy made with the goal of justifying heavy-handed regulation."
Indeed, legislators who lean both Democrat and Republican seldom meet in the middle when addressing digital privacy. Recall how Republican Gov. Ron DeSantis signed the country's most restrictive social media law to date, banning children under 13 from using platforms such as Instagram, Facebook and ByteDance's TikTok.
And Beijing-based Bytedance is already facing massive scrutiny from the federal government over fear that user data is vulnerable. A new bill seeks to force the company to sell its U.S. operations to a local buyer by early 2025. Otherwise, TikTok faces a complete shutdown in the U.S.
Republican nominee and former President Donald Trump has placed low emphasis on regulation ahead of the 2024 presidential election. After all, he has the support of X.com owner Elon Musk and several Silicon Valley billionaires, including Marc Andreessen and Ben Horowitz.
Vice President Kamala Harris, the Democratic nominee, has not pushed for big tech companies to be broken up. Instead, she argues that these companies should be "regulated in a way that we can ensure the American consumer can be certain that their privacy is not being compromised."