NGL becomes the first app banned from hosting minors by the FTC

Tuesday, FTC it was unanimously banned NGL social messaging app admitting to minors as part of $5 million settlement. In turn, the first ban comes after the company was found to be actively marketing the app to kids through bait-and-switch tactics, false claims of AI moderation, and attempts to attract “popular” kids (such as cheerleaders). others to a predatory hellscape.

“NGL sold its app despite knowing it exposed children and teens to cyberbullying and harassment,” FTC Chairwoman Lina Khan said. he wrote in the press release of the agency. “In light of NGL’s reckless disregard for the safety of children, the FTC’s order will prohibit NGL from being marketed or offered to anyone under the age of 18. We will continue to fight against businesses that illegally exploit children for profit.”

The FTC and the Los Angeles DA’s office worked together on the complaint, which paints a picture of an exploitative business that prefers to build its social graph while respecting even the most basic ethical rules. (A familiar voice?) NGL has “exploded” in popularity, even though it is still a relatively niche program that is not close to the popularity of Instagram, TikTok and other first-tier platforms. according to The Washington Post. In 2022, it briefly became the most downloaded app on the iOS App Store.

The company markets the app as a place for anonymous messaging with unknown friends and contacts from other social channels. That alone sounds like a recipe for disaster. But the FTC says the company made matters worse by falsely claiming to use “world-class AI content moderation” with “deep learning and model-matching algorithms” to prevent cyberbullying and other related behavior. It also sent fake, computer-generated messages — which users believed were from their real friends — asking, “Are you real?” with provocative hints like. and “I know what you’re doing.”

In addition, the company is alleged to have predatory business practices, as well as a “bait-and-switch” sales tactic that promises to reveal the identities of anonymous “friends” (which may be fake) if they pay up to $10 a week for a premium subscription. After paying, the service will only provide useless “hints” such as the message’s timestamp, the sender’s general location, and whether they’re using an iPhone or Android phone. It will also enable recurring, hard-to-cancel charges that users don’t expect.

To make matters worse, Joao Figueiredo, one of the company’s co-founders, instructed employees to “watch the high school cheer.” [Instagram] In the “pages” section, find “kids who are popular for writing information and getting their friends to write”. One user claimed that a friend of his had attempted suicide because of his experiences at NGL.

When consumers complained, NGL executives allegedly laughed them off as “suckers.”

The FTC and Los Angeles DA added that NGL violated COPPA. It requires companies with programs that are “directed at or knowingly used by children under 13” to tell parents about the personal information they collect. Other charges include violations of the Restoring Online Shoppers Trust Act.

Additionally, Trash Fire, known as NGL, allegedly failed to attempt to verify the age of users, failed to obtain parental consent to collect and use data from minors, and failed to comply with parental requests to delete children’s data. Finally, the company allegedly “kept children’s data longer than was necessary to fulfill the purpose for which the data was collected.”

Under the terms of the settlement, NGL and its co-founders agreed to pay $4.5 million to “provide restitution to consumers” and a $500,000 civil penalty to the LA DA’s office. The company will then have to require an age gate that prevents new and current users under the age of 18 from using the app, deletes all information related to those under 13, agrees not to misrepresent the origin of messages, or make false claims about artificial intelligence technology. and obtained consent from consumers before paying for subscriptions (making it simple to cancel recurring payments).

It remains to be seen whether the FTC can use its unanimous, bipartisan ruling against NGL to go after bigger fish in the social arena. a blatantly unethical marketing tactic from themselves.

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