The U.S. Federal Trade Commission (FTC) is seeking a ban on social media giant Meta Platforms (NASDAQ:META) to prevent it from monetizing data it collects from users under the age of 18. The agency proposed changes to its 2020 privacy order, citing non-compliance by the Facebook owner.
The FTC alleged that the company misled parents about their ability to control their children’s communication through its Messenger Kids app. Further, the company provided some app developers access to private user data.
“The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
The changes proposed by the FTC include barring Meta from making profits from data collected from minor users, including data gathered through its virtual reality products, additional protections to users, and expanded limitations on the use of facial recognition technology.
This is the third time that FTC is taking action against Facebook for alleged privacy violations. In 2019, the company agreed to an FTC order (became effective in 2020) that required it to pay a record fine of $5 billion to settle allegations about violating a 2012 consent order by misleading users about how much control they have over personal data.
Meta slammed the FTC’s action, calling it a “political stunt.” The company spokesperson stated that Meta was being singled out by the FTC, while Chinese companies, like TikTok, are being allowed to operate without any constraint in the U.S.
Is META Stock a Buy, Hold, or Sell?
Wall Street’s Strong Buy consensus rating for Meta Platforms is backed by 40 Buys, five Holds, and two Sells. The average price target of $277 suggests nearly 17% upside. Shares have jumped about 97% so far in 2023.
