The new terms of the settlement, which are still subject to a judge's approval, mark the FTC's latest effort to crack down on companies that violate children's privacy or otherwise harm them. The commission has filed several complaints related to the Children's Online Privacy Protection Act (COPPA), including against Fortnite-creator of Epic Games, Microsoft Xboxand a Weight Watchers weight loss app marketed to childrenBut prohibiting a company from offering its app to children is what sets this agreement apart.
NGL is an application where users can ask anonymous messages or questions to their peers. Google Play Store Pageencourages users to share their NGL link in their instagram bio “to get even more messages.” The FTC and the Los Angeles district attorney’s office accused NGL and its two co-founders of tricking young users into signing up for the paid version of the service by sending them fake messages that appeared to be from real people and falsely promising that paying would reveal the senders’ identities. But when users signed up for up to $9.99 a week, they only received “clues” about the senders’ identities, the complaint alleges. NGL’s product lead allegedly wrote “Lol suckers” in a text with the company’s co-founders in response to a customer complaint that the paid version doesn’t actually show who sent certain messages.
NGL also falsely claimed it could filter out cyberbullying and other harmful messages through artificial intelligence content moderation tools, according to the agents’ complaint. They allegedly promoted the app as a “fun but safe place” for “young people… to share their feelings without being judged by friends or social pressures” and defied Apple’s suggestion that the app should not be rated for people “12 and older.” But in reality, according to the complaint, cyberbullying was “rampant” on the service, with the company allegedly receiving consumer complaints about self-harm and suicide attempts that users attributed to experiences on the NGL app.
The app also allegedly violated COPPA by failing to obtain parental consent for their children under 13 to use the service and by failing to honor their requests to delete their children's data. In addition to the age restriction conditions, NGL agreed to pay $5 million to settle the charges.
“After nearly two years of cooperating with the FTC’s investigation, we see this resolution as an opportunity to make NGL better than ever for our users and believe the settlement is in our best interest,” NGL co-founder Joao Figueiredo said in a statement. “While we believe many of the allegations about the youth of our user base are factually incorrect, we anticipate that the agreed-upon age limit and other procedures will now provide direction for others in our space and hopefully improve policies overall.”
The commissioners voted 5-0 to file the complaint and settlement order, but the two Republican commissioners made clear their belief that Section 5 of the FTC Act, which prohibits deceptive trade practices, cannot necessarily be used against any anonymous messaging app targeting children. In a concurrent statementRepublican Commissioner Andrew Ferguson wrote that he supports the complaint against NGL and believes the app’s “alleged conduct, custom-designed to manipulate the vulnerable psyche of teenagers, was reprehensible and unfair.” But, he added, “it does not follow that Section 5 categorically prohibits the marketing of any anonymous messaging app to teenagers.” Republican Commissioner Melissa Holyoak joined the statement.
The Republican commissioners' statement is significant at a time when states across the country are passing laws to restrict age on certain parts of the Internet. Recently, the Supreme Court He agreed to take a case involving a Texas age verification law.Ferguson warned that interpreting any law to categorically ban anonymous messaging services to minors “would create serious constitutional problems.” She added that there are “real benefits” to allowing teens online anonymity, including protection from the “mob” of cancel culture. She also said Holyoak “correctly notes that it can be used to encourage at-risk teens to seek help that they might not otherwise feel comfortable seeking.”
