The Federal Trade Commission is demanding that nine social media and tech companies share details on how they harness users' data and what they do with the information.
Amazon.com, TikTok owner ByteDance, Discord, Facebook,
Reddit, Snap, Twitter, WhatsApp (also owned by Facebook), and YouTube were sent
orders by the FTC on Monday to provide the commission with details on their
data collection and advertising practices. The companies have 45 days to
respond to the order.
Representatives for these companies didn't immediately
respond to NPR's request for comment.
The inquiry is the latest move by federal regulators to
crack the whip on big tech in an attempt to monitor their activities. Increased
scrutiny by federal and state officials this year has pushed major social media
websites and apps to answer for perceived improper uses of consumer data and
violations of federal anti-monopoly law.
This order comes just a week after the FTC and 48 attorneys
general across the country filed lawsuits against Facebook, accusing the social
media giant of unlawfully maintaining a monopoly. The company has denied this
claim.
The FTC's request for information covers a wide scope in
order "to understand how business models influence what Americans hear and
see, with whom they talk, and what information they share." The agency is
using its authority under Section 6(b) of the FTC Act, which allows it to
undertake broad studies separate from law enforcement.
"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," FTC Commissioners Rohit
Chopra, Rebecca Slaughter, and Christine Wilson said in a statement. "It
is alarming that we still know so little about companies that know so much
about us."
The commission wants the tech companies to detail how many users
each company has, how active they are, and what else is known about them. The
inquiry also asks the social media and video streaming companies to hand over
information on how they process the data collected and how advertising and
engagement practices impact young, underage users.
The commissioners voted to issue Monday's orders in a 4-1
vote. Republican Commissioner Noah Joshua Phillips dissented.
In a statement, Phillips wrote, "The breadth of the
inquiry, the tangential relationship of its parts, and the dissimilarity of the
recipients combine to render these orders unlikely to produce the kind of
information the public needs, and certain to divert scarce Commission resources
better directed elsewhere."
Big tech scrutiny
Lawmakers and civil and consumer rights groups have placed
big tech under the microscope this year in particular, following revelations
showing questionable practices by major websites and apps.
The Wall Street Journal has reported on how apps share user
information with Facebook. The newspaper also recently revealed that Amazon was
scooping up data from independent sellers and using it to create its own
competing products. Amazon executives have denied this.
This summer, Facebook's Mark Zuckerberg, Amazon's Jeff
Bezos, Google's Sundar Pichai and Apple's Tim Cook testified virtually before
Congress over Silicon Valley's perceived monopoly power.
During this hearing, Bezos acknowledged the $1 trillion
company may be misusing data to push out independent sellers. He said the
company is undergoing an internal investigation into the matter.
This year alone has brought major lawsuits against tech
companies. In addition to the blockbuster lawsuit filed against Facebook last
week, the U.S. Justice Department and 11 states sued Google, alleging the
company violated competition law.
How these companies interact with underage users and what
information gleaned from their activity has also been the subject of
litigation.
In August, the parents of dozens of minors sued TikTok in
federal court, alleging that the popular video-sharing app collects information
about their users' facial characteristics, locations and close contacts. The
company then sends that data to servers in China without users knowing and
potentially shares it with the Chinese Communist Party, the lawsuit alleges.
The Trump administration considers TikTok a national
security threat because the parent company is based in China and it shares
concerns that information from U.S.-based users is being collected by Beijing.
TikTok denies these allegations, but says it can share user information to its
servers, if it chooses to, without breaking U.S. law.
Civil rights groups and consumer groups are urging regulators
to go further and examine popular dating apps, Grindr, Tinder and OKCupid.
The Norwegian Consumer Council published a report in January showing 10 apps collected sensitive information including a user's exact location, sexual orientation, religious and political beliefs, drug use and other information in a practice called "data harvesting." The apps then transmitted the personal data to at least 135 different third-party companies.