The Federal Trade Commission (FTC) has taken a major step by unanimously banning the social messaging app NGL from hosting minors as part of a $5 million settlement. This unprecedented move comes after it was revealed that NGL engaged in deceptive marketing practices targeted at children, exposed them to cyberbullying, and failed to prioritize their safety.
FTC Chair Lina Khan emphasized that NGL knowingly put kids and teens at risk of cyberbullying and harassment through its app. The FTC’s order prohibits NGL from marketing or offering its app to those under 18, sending a strong message that businesses exploiting children for profit will not be tolerated.
Collaborating with the Los Angeles District Attorney’s office, the FTC uncovered a pattern of exploitative behavior by NGL that prioritized expanding its social network over ethical considerations. Despite being a niche app, NGL experienced a surge in popularity and briefly became the most downloaded app on the iOS App Store in 2022.
The app’s marketing pitch of anonymous messaging with unknown contacts raised concerns, but it was further exacerbated by false claims of AI content moderation to prevent cyberbullying. NGL also engaged in predatory practices such as upselling premium subscriptions with false promises and recurring charges that users found difficult to cancel.
Moreover, co-founder Joao Figueiredo allegedly instructed employees to target popular high school students on social media to promote the app, leading to harmful consequences for some users. Complaints from consumers were dismissed by NGL executives, further highlighting the company’s disregard for user safety and satisfaction.
In addition to violating the Children’s Online Privacy Protection Act (COPPA) Rule, NGL failed to verify users’ ages, obtain parental consent for collecting data from children under 13, and promptly delete children’s data upon request. The company also retained children’s data longer than necessary, violating consumer privacy rights.
Under the settlement agreement, NGL and its co-founders will pay $4.5 million for consumer redress and a $500,000 civil penalty to the LA DA’s office. Moving forward, NGL must implement strict age verification measures, delete data associated with minors, refrain from deceptive marketing tactics, and obtain consumer consent before charging for subscriptions.
The FTC’s action against NGL sets a precedent for holding social media platforms accountable for unethical practices that harm users, especially minors. By cracking down on exploitative behavior, the FTC aims to protect vulnerable populations and promote responsible business conduct in the digital landscape.
