Tag: ftc
The FTC Is Trying to Ban Meta From Using Kids’ Data
The Federal Trade Commission proposed a “blanket prohibition” that would ban Meta from monetizing children’s data Wednesday. The FTC says Meta—the company formerly known as Facebook—failed to comply with an existing 2020 privacy order by misleading parents about the control they have over Facebook Messenger, and…
The FTC wants to ban Meta from profiting from kids’ data
Meta is in hot water with the Federal Trade Commission once again after the agency proposed more sanctions against the company, which has allegedly failed to fully comply with a 2020 privacy order. Among other things, the agency has proposed a blanket ban on monetizing data Meta collects from users aged under 18, whether they use Facebook, WhatsApp, Instagram or Quest virtual reality headsets.
The proposed sanctions, which the FTC seeks to apply as part of an update to the 2020 order, include a ban on Meta launching new products, services and features unless an assessor confirms that the company is in full compliance with its obligations. Additionally, Meta would have to get explicit consent from users before employing facial recognition tech. All of these measures, plus others the FTC has proposed to strengthen aspects of the 2020 order, would apply to companies that Meta buys or merges with.
The FTC issued the most recent privacy order, which is in place for 20 years, as part of a $5 billion settlement that Meta (then known as Facebook) reached with the agency over the Cambridge Analytica scandal. At the time, the FTC determined that Meta had broken a 2012 order concerning user data privacy. Along with allegedly failing to comply with the 2020 order, Meta has violated the Children’s Online Privacy Protection Act (COPPA), according to the FTC.
“Facebook has repeatedly violated its privacy promises,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.”
Among other things, Meta allegedly misled parents over how much control they have over who their children can communicate with through the Messenger Kids app. The FTC says that, between 2017 and mid-2019, children were able to chat with unapproved contacts through the app in violation of the 2012 order and COPPA.
Moreover, the agency says that Meta continued to provide third-party developers access to user data, despite pledging in 2018 to revoke access to the information if users hadn’t accessed their apps within a 90-day period. According to the FTC, Meta allowed third-party developers to maintain access to user data in certain situations until some point in 2020.
An assessor that the FTC appointed to ensure Meta’s compliance with the 2020 order found that there were several flaws with the company’s privacy program. In its Order to Show Cause, the FTC said that “the breadth and significance of these deficiencies pose substantial risks to the public.”
Moreover, the agency says that Meta continued to provide third-party developers access to user data despite pledging in 2018 to revoke access to the information if users hadn’t accessed their apps within a 90-day period. According to the FTC, Meta allowed third-party developers to maintain access to user data in certain situations until some point in 2020.
Meta has called the FTC’s move “a political stunt.” Perhaps unsurprisingly, given the potential impact on its business, Meta is gearing up for a legal battle with the agency. “Despite three years of continual engagement with the FTC around our agreement, they provided no opportunity to discuss this new, totally unprecedented theory,” the company said in a statement that spokesperson Andy Stone shared on Twitter.
“Let’s be clear about what the FTC is trying to do: usurp the authority of Congress to set industry-wide standards and instead single out one American company while allowing Chinese companies, like TikTok, to operate without constraint on American soil. FTC Chair Lina Khan’s insistence on using any measure — however baseless — to antagonize American business has reached a new low. We have spent vast resources building and implementing an industry-leading privacy program under the terms of our FTC agreement. We will vigorously fight this action and expect to prevail.”
This article originally appeared on Engadget at https://www.engadget.com/the-ftc-wants-to-ban-meta-from-profiting-from-kids-data-180720686.html?src=rss
FTC warns tech companies against AI shenanigans that harm consumers
Since its establishment in 1914, the US Federal Trade Commission has stood as a bulwark against the fraud, deception, and shady dealings that American consumers face every day — fining brands that “review hijack” Amazon listings, making it easier to cancel magazine subscriptions and blocking exploitative ad targeting. On Monday, Michael Atleson, Attorney, FTC Division of Advertising Practices, laid out both the commission’s reasoning for how emerging generative AI systems like ChatGPT, Dall-E 2 could be used to violate the FTC Act’s spirit of unfairness, and what it would do to companies found in violation.
“Under the FTC Act, a practice is unfair if it causes more harm than good,” Atleson said. “It’s unfair if it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers and not outweighed by countervailing benefits to consumers or to competition.”
He notes that the new generation of chatbots like Bing, Bard and ChatGPT can be used to influence the user’s, “beliefs, emotions, and behavior.” We’ve already seen them employed as negotiators within Walmart supply network and as talk therapists, both occupations specifically geared towards influencing those around you. When combined with the common effects of automation bias, wherein users more readily the accept the word of a presumably impartial AI system, and anthropomorphism. “People could easily be led to think that they’re conversing with something that understands them and is on their side,” Atleson argued.
He concedes that the issues surrounding generative AI technology go far beyond the FTC’s immediate purview, but reiterates that it will not tolerate unscrupulous companies from using it to take advantage of consumers. “Companies thinking about novel uses of generative AI, such as customizing ads to specific people or groups,” the FTC lawyer warned, “should know that design elements that trick people into making harmful choices are a common element in FTC cases, such as recent actions relating to financial offers, in-game purchases, and attempts to cancel services.”
The FTC’s guardrails also apply to placing ads within a generative AI application, not unlike how Google inserts ads into its search results. “People should know if an AI product’s response is steering them to a particular website, service provider, or product because of a commercial relationship,” Atleson wrote. “And, certainly, people should know if they’re communicating with a real person or a machine.”
Finally, Atleson leveled an unsubtle warning to the tech industry. “Given these many concerns about the use of new AI tools, it’s perhaps not the best time for firms building or deploying them to remove or fire personnel devoted to ethics and responsibility for AI and engineering,” he wrote. “If the FTC comes calling and you want to convince us that you adequately assessed risks and mitigated harms, these reductions might not be a good look.” That’s a lesson Twitter already learned the hard way.
This article originally appeared on Engadget at https://www.engadget.com/ftc-warns-tech-companies-against-ai-shenanigans-that-harm-consumers-175851417.html?src=rss
US FTC Leaders Will Target AI That Violates Civil Rights Or Is Deceptive
Khan agreed the newest versions of AI could be used to turbocharge fraud and scams and any wrongdoing would “should put them on the hook for FTC action.” Slaughter noted that the agency had throughout its 100 year history had to adapt to changing technologies and indicated that adapting to ChatGPT and other artificial intelligence tools were no different. The commission is organized to have five members but currently has three, all of whom are Democrats.
Read more of this story at Slashdot.
FTC warns that AI technology like ChatGPT could ‘turbocharge’ fraud
In a Congressional hearing on Tuesday focused on the Federal Trade Commission’s work to protect American consumers from fraud and other deceptive practices, FTC chair Lina Khan and fellow commissioners warned House representatives of the potential for modern AI technologies, like ChatGPT, to be used to “turbocharge” fraud. The warning was issued in response to […]
FTC warns that AI technology like ChatGPT could ‘turbocharge’ fraud by Sarah Perez originally published on TechCrunch
Twitter exposes secrets, FTC clamps down on review hijackers and Android 14 arrives
Hello, friends. Looking for a recap of this week’s news? You’re in the right place. It’s Week in Review (WiR), the (more or less) regular newsletter that recaps the top stories from the past few days written by the talented TC team. (Woot, alliteration.) There’s no quicker way to catch up on the stuff that […]
Twitter exposes secrets, FTC clamps down on review hijackers and Android 14 arrives by Kyle Wiggers originally published on TechCrunch
Congressional Republicans subpoena the FTC for asking Twitter too many questions
The House Judiciary Committee on Wednesday subpoenaed the Federal Trade Commission for documents related to its ongoing privacy investigation into Elon Musk’s Twitter, as first reported by The Wall Street Journal.
Rep. Jim Jordan (R-OH), chair of the committee, authorized the subpoena sent to FTC Chair Lina Khan, accusing the agency of refusing to comply with a handful of other requests the committee has made over the last few months. The demand requires the FTC to hand over all internal communications related to Musk’s October 2022 purchase of Twitter.
In his letter to Khan Wednesday, Jordan accused the FTC of making “inappropriate and burdensome demands” of Musk’s Twitter, calling the agency’s responses to past requests for…
FTC fines supplement maker $600,000 for ‘review hijacking’ Amazon listings
For the first time, the US Federal Trade Commission has fined an organization for “review hijacking.” In February, the agency accused The Bountiful Company, maker of the Nature’s Bounty brand of vitamins, of deceiving consumers. Between 2020 and 2021, Bountiful abused a feature of Amazon to make it seem like some of its newer supplements had higher product reviews and ratings than they did in reality.
If you have ever bought something on Amazon, you’ve almost certainly interacted with the feature Bountiful attempted to game. Some listings include a set of icons that highlight different “variations” of that same product. For example, if you visit the page for Sony’s popular WH-1000XM5, the feature will highlight that the headphones are available in three different colors. By design, Amazon designed this feature to be narrow. Sellers are supposed to use it to showcase that a product they offer is available in a different color, size, quantity or flavor.
That’s not what The Bountiful Company did. According to the FTC, Bountiful used the feature to give newer products a boost from older, more well-established ones with different formulations. In one internal email the agency obtained, Bountiful lamented that “people did not love” one of its new vitamins but noted sales “spiked the second we variated the pages and they continue to grow.”
On Monday, the FTC said it voted unanimously to approve a consent order that carries a $600,000 fine for Bountiful and bars the company from employing such tactics in the future. “Boosting your products by hijacking another product’s ratings or reviews is a relatively new tactic, but is still plain old false advertising,” said Samuel Levine, the director of the FTC’s Bureau of Consumer Protection.
“There’s no place for fraud in Amazon’s store. We have proactive measures in place to prevent listing abuse and we continuously monitor our store,” an Amazon spokesperson told Engadget. “Our policies prohibit reviews abuse including offering incentives like gift cards to write positive reviews. We suspend, ban, and take legal action against those who violate these policies and remove inauthentic reviews.”
According to Amazon, “more than 99 percent” of the products people view on its marketplace “contain only authentic reviews.” If you find what you think is a fake review, the company recommends tapping the “Report” button so it can investigate and take action. The spokesperson added Amazon would continue working with FTC and other enforcement agencies to combat fraudsters.
This article originally appeared on Engadget at https://www.engadget.com/ftc-fines-supplement-maker-600000-for-review-hijacking-amazon-listings-210142185.html?src=rss
FTC orders supplement maker to pay $600K in first case involving hijacked Amazon reviews
The U.S. Federal Trade Commission has approved a final consent order in its first-ever enforcement action over a case involving “review hijacking,” or when a marketer steals consumer reviews of another product to boost the sales of its own. In this case, the FTC has ordered supplements retailer The Bountiful Company, the maker of Nature’s […]
FTC orders supplement maker to pay $600K in first case involving hijacked Amazon reviews by Sarah Perez originally published on TechCrunch