On Wednesday, the Federal Trade Commission accused Facebook (a unit of Meta Platforms) of violating its 2020 privacy order. The agency also proposed new protections to protect children and teenagers. Meta's stock dropped on the news.
The FTC proposed that as a sanction it would prohibit Facebook from monetizing data on youth.
According to the FTC, Facebook misled parents regarding their ability control who their children can communicate with through Messenger Kids. The agency also said that Facebook misrepresented its access to private user data for some app developers.
In a press release, Samuel Levine, Director of the FTC Bureau of Consumer Protection said that Facebook had repeatedly broken its privacy promises. Facebook's irresponsibility has put the safety of young users in danger. The company must answer for their failures.
Meta Stock Ignores FTC Action
Meta stock fell a tiny bit in today's afternoon stock market trading, to 238.98. Meta stock has risen 98.6% in the past year.
Meta will be prohibited by the FTC from profiting off of data collected from users younger than 18. The agency also said that this would apply to Facebook, Instagram and WhatsApp, as well as Meta's virtual reality products.
This is the third time that the FTC has taken legal action against Facebook because it allegedly failed to protect user privacy.
The FTC allowed Meta 30 days to reply to its findings and proposed changes. Meta officials have not responded to an IBD request for comment.
Meta stock is included in IBD's list.