• by Wendy Davis , December 6, 2023

The Federal Trade Commission is asking an appellate court to reject Meta Platforms' emergency request to immediately halt an administrative proceeding that could result in an FTC order banning the company from monetizing minors' data.

In papers filed Wednesday with the D.C. Circuit Court of Appeals, the agency says Meta lacks grounds for the “extraordinary remedy” of an injunction for several reasons including, essentially, that the company's attempt to involve the courts is premature. The FTC specifically notes that even if it issues an order against Meta after an administrative hearing, Meta would then be able to ask a federal appellate court to reverse the order.

The FTC's papers come in an ongoing fight with Meta over the terms of a settlement stemming from charges that Meta allowed Cambridge Analytica and other outside developers to access users' data. That settlement, which was approved in 2020 by U.S. District Court Judge Timothy Kelly in Washington, D.C., required Meta to pay $5 billion, implement new privacy oversight and obtain independent privacy assessments.

In May, the FTC proposed modifying that settlement by adding new terms that would ban Meta from using minors' data to fuel ad targeting or algorithms, and also prohibit the company from launching new products without an assessor's confirmation that Meta's privacy program has no gaps or weaknesses.

The FTC alleged at the time that Meta's Messenger Kids had coding errors that allowed children to communicate with people who hadn't been approved by parents, in violation of statements about the service's features. The commission also said an independent assessor “identified several gaps and weaknesses” in Meta's privacy program. The agency contended that those glitches violated the federal children's privacy law, and show why the 2020 order should be modified.

When the FTC proposed the modifications, the agency demanded that Meta appear at an administrative hearing -- meaning an in-house FTC hearing -- at which the FTC itself would decide whether to revise the terms.

Meta petitioned Kelly to issue an injunction against such a proceeding, arguing that the settlement terms were approved by him, and therefore could only be modified by him (or another district court judge) and not the FTC itself.

Late last month, Kelly rejected that argument, ruling that he lacked jurisdiction over the settlement conditions. He wrote that even though Meta's agreement with the FTC was attached as an exhibit to the judgment he approved, he didn't retain jurisdiction over that agreement.

Last week, Meta appealed that ruling to the D.C. Circuit Court of Appeals and sought an emergency injunction halting a planned administrative hearing.

The company contended in its emergency petition that the FTC is violating the 2020 agreement “by unilaterally rewriting” its terms.

Meta added that litigating at an administrative hearing will deprive the company of district courts' “inherent” safeguards.

“Federal judges are impartial factfinders, whereas the Commission has not lost an administrative proceeding this century,” the company wrote.

The FTC countered Wednesday that the FTC Act and regulations give the agency authority to modify orders.

The agency added that its proposed modifications reflect concerns “that Meta’s recent conduct may put consumers’ privacy at risk.”

Meta is expected to respond in writing by December 7.