Tech

FTC wants ByteDance, Facebook, Snap to explain what they do with user data

FTC orders ByteDance, Facebook, Snap - Appy Pie

The Federal Trade Commission has asked nine tech companies to share information about how they collect and use data from their users.

FTC has sent orders to Amazon, TikTok owner ByteDance, Reddit, Facebook and its subsidiary WhatsApp, Snap, Discord, Twitter, and Google-owned YouTube to hand over the information about their data practices. The FTC has set a 45 days deadline to respond from the date they received the orders.

Along with the information about how the services collect and use data, FTC is also seeking detailed information about how the companies determine which ads to show to their users, whether algorithms or data analytics are used on personal information, and also how the companies measure, promote, and research engagement from users and how their data practices impact children.

The FTC’s new fact-finding mission is the latest federal action to put tech in its crosshairs. The new order has been issued under Section 6(b) of the FTC Act. In early 2020, to examine past acquisitions by Google parent Alphabet, Amazon, Apple, Facebook, and Microsoft that would not have been subject to pre-reporting rules for mergers.

The FTC filed charges against Facebook last week alleging the company has unlawfully maintained a monopoly in personal social networking services. The lawsuit claims Facebook bought up new rivals like Instagram and WhatsApp that it feared would enter its core business area. The law enforcers claim Facebook’s actions have harmed consumers in part by diluting the quality of services available. Facebook called the lawsuit of its two major acquisitions which FTC itself allowed to go through.

The commissioners voted to issue orders in a 4-1 vote with Republican Commissioner Noah Joshua Phillips dissenting. Phillips wrote in a statement that while he appreciates the aim of the orders, and believes that they are an undisciplined foray into a wide variety of topics.”

Three of the commissioners who voted in favor of the action said in a statement, “The FTC wants to understand how business models influence what the US users hear and see, who they talk to, and what information they share. FTC wants to better understand the financial incentives of video streaming services and social media.”

A Twitter spokesperson claimed, “We are working to ensure the FTC has the information it needs to understand how Twitter operates.”

A Discord spokesperson said in a statement “Discord takes user privacy very seriously and we look forward to working with the FTC to answer their questions about our privacy practices. Moreover, there are no ads on Discord. We don’t make money from advertising, selling user data to advertisers, or sharing users’ information with others. Instead, the company generates its revenue directly from users through Nitro, a paid subscription service.”

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