• by Wendy Davis , November 30, 2023

Meta Platforms on Wednesday escalated its battle with the Federal Trade Commission by claiming in a new lawsuit that the agency's structure, including its ability to conduct in-house hearings, is unconstitutional.

The lawsuit -- which comes as Meta and the FTC are battling over teens' data -- includes a request to prevent the agency from moving forward with a hearing that could result in an order prohibiting Meta from using teens' data for ad targeting or algorithms.

“Meta respectfully requests that this court declare that certain fundamental aspects of the Commission’s structure violate the U.S. Constitution, and that these violations render unlawful the FTC proceeding against Meta,” the company's lawyers write in a complaint brought in U.S. District Court in Washington, D.C.

Earlier this week, a federal judge rejected a separate request by Meta to stop the FTC from moving forward with its effort to prohibit the company's use of minors' data. Meta is appealing that decision to the D.C. Circuit Court of Appeals.

Meta's new complaint raises a host of constitutional claims, including that FTC administrative hearings -- at which the agency serves as both prosecutor and judge -- deprive companies of due process of law. Among other arguments, Meta claims that such hearings deprive it of a constitutional right to a jury trial.

The current battle between the FTC and Meta began in May, when the agency sought to modify a 2020 settlement of charges that Meta allowed Cambridge Analytica and other outside developers to access users' data.

That settlement required Meta to pay $5 billion, and called for the company to implement new privacy oversight and obtain an independent assessment.

In May, the FTC sought to modify the settlement by launching an administrative proceeding that could result in an order prohibiting Meta from monetizing teens' data. Several weeks later, Meta sued to block the FTC from continuing with the administrative case, arguing that the agency shouldn't be able to unilaterally impose new settlement terms.

On Monday, U.S. District Court Judge Timothy Kelly in Washington, D.C., who approved the 2020 settlement, ruled that he lacked jurisdiction to rule on the proposed modifications.

Meta now says in its new petition that the FTC's attempt to revise the 2020 order represents an “obvious power grab.”

The company also characterized the FTC's in-house hearing as “an illegitimate proceeding by an illegitimate decision maker.”

Meta's challenge to the FTC's constitutionality comes as the Supreme Court is considering whether to limit federal agencies' power. Earlier this week, that court heard arguments about the Securities and Exchange Commission's ability to bring enforcement actions at administrative proceedings -- as opposed to in court.

The court is also expected to soon consider the extent to which federal agencies can issue regulations. Business groups and conservatives support some of the current efforts to curb agencies' authority.

Senator Ed Markey (D-Massachusetts), who has proposed legislation that would restrict companies' ability to collect data from teens, criticized Meta's new lawsuit.

“When a Big Tech company wants to take the federal cop off the beat, it’s probably because it doesn’t want to be caught,” Markey stated. “Meta's adoption of extreme, right-wing legal theories to challenge our country’s premier, consumer protection agency reeks of desperation.”

John Davisson, director of litigation and senior counsel at the Electronic Privacy Information Center -- which also supports new restrictions on data collection -- also suggested Meta's new lawsuit lacks merit.

“I think it raises lots of implausible constitutional theories about why longstanding FTC and administrative enforcement practices and structures are supposedly unconstitutional,” he tells MediaPost.

He added that the lawsuit might simply be a way for Meta to buy more time, in hopes that the FTC will change its position.

“I think it is an opportunity to extend the clock for Meta,” he says. “I'm cautiously optimistic that the court will see this for what it is -- one more serial attempt by Meta to delay the agency adjudication that should take place in this case.”

Santa Clara University law professor Eric Goldman questioned Meta's strategy in targeting the FTC.

“It takes a lot of gumption for Facebook to basically try to negate the primary consumer protection agency with authority over it,” he tells MediaPost. “That's not exactly the best marketing message for Facebook to send to the public.”

He added that Facebook may be “attacking the FTC at an existential level” because the company perceives itself as under threat.