FTC bans anonymous messaging app NGL from hosting children

The complaint alleges that NGL tricked users into paying for subscriptions by sending them computer-generated messages that appeared to be from real people and offering a $9.99-a-week service to reveal their true identities. Those who signed up received only “hints” of those identities, whether they were real or not, the promoters said.

The FTC said in an announcement that when users complained about “seduction and deception” tactics, company executives “laughed off” their concerns and called them “fools.”

NGL, which means “won’t lie” on the Internet, agreed to pay $5 million and stop marketing to children and teens to settle the lawsuit, which also alleged that the company violated children’s privacy laws by collecting data from young people under 13 without parental consent.

The settlement marks a major milestone in the federal government’s efforts to combat concerns that tech platforms are exposing children to harmful content and profiting from it. And it’s one of the most significant actions the FTC has taken under Chairman Lina Khan, who has increased scrutiny of the tech sector at the agency since taking office in 2021.

“We will continue to crack down on businesses that illegally exploit children for profit,” Khan (D) said in a statement.

NGL co-founder João Figueiredo said in a statement Tuesday that the company cooperated with the FTC’s investigation for nearly two years and sees this “solution as an opportunity to make NGL better than ever.”

“While we believe many of the allegations made about the youth of our user base are factually incorrect, we hope that the agreed age-limits and other procedures now in place will provide direction for others in our sector, and hopefully lead to improved policies in general,” Figueiredo said.

NGL has exploded in popularity, with its users exceeding 200 million. At one point it became the most downloaded product on Apple’s App Store just a year after its launch in 2021. The platform allows users to anonymously answer questions from friends and social media contacts and Market yourself As a place where people can play games like “I never did that.”

But it is one of many anonymous messaging services whose prevalence among young people has raised concerns among child safety advocates, who say the companies have failed to do enough to prevent cyberbullying and other harmful activities on their products.

In October, child safety group Fairplay and parent activist Kristin Braide lodged a complaint The FTC has been urged to investigate allegations that the app’s parent company, NGL Labs, illegally marketed itself to children using unfair and deceptive business practices.

Bride’s 16-year-old son Carson died by suicide in 2020 after experiencing cyberbullying on two different anonymous messaging services, YOLO and LMK. Bride has said that Carson last searched on his phone to find out who was harassing him anonymously online.

“It was extremely concerning to learn that a new anonymous app, NGL, came to market and found a way to further monetise its dangerous product by charging money from vulnerable teens for useless indications of who is sending them messages,” wrote Bride said in a statement last year,

The agency said it “received invaluable assistance from FairPlay and social media reform advocate Kristin Bride” in the matter.

FairPlay policy counsel Haley Hinkle said Tuesday that the FTC’s move “demonstrates once again that tech companies must live up to their obligations to children and teens.”

Under the deal, NGL will be required to prevent users who represent they are under the age of 18 from accessing the app and delete any data it receives from younger children unless a parent signs off on it. The company will also be prevented from making misrepresentations about its ability to filter cyberbullying or who sends messages on its app.

Several states have passed laws requiring websites and social media platforms to check the age of users to ensure they are not children or teens, a practice often called “age verification” or “age-checking”.

However, digital rights and tech industry groups have expressed concerns that the restrictions violate free speech and force companies to collect even more data from users to verify their age, harming online privacy. There are also questions about the effectiveness of the restrictions, with some FTC officials even suggesting that children could find ways to circumvent them.

The Supreme Court has Ready to consider A Texas law requires websites to verify that users are adults in order to access pornography, a case that could also have implications for laws governing access to social media.

Although the settlement is limited to one company, it represents one of the FTC’s strongest actions to date to better protect children online under the law.

The agency approved the agreement unanimously, 5-0, with both of the FTC’s newest Republican commissioners joining Khan and the other Democrats. The vote reflects bipartisan concern in Washington over children’s online safety.

in a statementGOP Commissioner Melissa Holyoak said NGL had “engaged in truly disgusting conduct” by “inciting teens and adolescents to sign up for paid subscriptions.” Holyoak condemned NGL for enticing young users with messages allegedly delivered by their friends that included phrases like “Are you straight?” and “I know what you did.”

Andrew Ferguson, the agency’s other Republican, said he supported the settlement “unconditionally,” calling it a “new” approach to the agency’s enforcement of protecting children online. But Ferguson said he doesn’t believe federal law “categorically prohibits the marketing of any anonymous messaging app to teens.”

The agency last year reached a record $520 million settlement with Epic Games, maker of the popular “Fortnite” video game series, over allegations that the company violated children’s data privacy laws and deceived players into making unwanted purchases. But the agreement fell short of placing any restrictions on marketing to people under 18.

The FTC separately proposed a sweeping plan to prevent Facebook and Instagram parent company Meta from monetizing data on children and teens under the age of 18, but the plan has yet to be implemented due to multiple legal challenges from the tech giant. The agency proposed the restrictions as an update to its landmark $5 billion privacy settlement with the company.

The FTC is also considering broadening its enforcement of the landmark Children’s Online Privacy Protection Act. Under the proposed regulation, platforms would be required to stop targeting advertising to children under 13 by default.