• by Wendy Davis  @wendyndavis, December 28, 2023

Meta Platforms on Wednesday pressed its argument that the Federal Trade Commission's structure, including the way it conducts in-house enforcement actions, is unconstitutional.

“The Commission’s dual role as prosecutor and judge ... is flatly inconsistent with fundamental principles of due process,” Meta argues in papers filed with U.S. District Court Judge Randolph Moss in Washington, D.C.

The company is seeking an injunction to halt an in-house proceeding that could result in an FTC order banning Meta from monetizing minors' data.

“The conflict inherent in the Commission’s dual role has materialized in the form of a long history of biased administrative adjudication resulting in an unbroken, decades-long string of home-turf victories which contrasts starkly with the Commission’s struggling record in judicial actions before neutral adjudicators,” Meta writes. The company elaborates that in 2023, the FTC failed to convince judges to rule in its favor in several high profile lawsuits -- including ones aimed at preventing Meta's acquisition of virtual fitness app Supernatural.

This current battle between the FTC and Meta dates to May, when the agency sought to modify a 2020 privacy settlement. That deal, which largely stemmed from allegations that Meta allowed Cambridge Analytica to obtain users' data, required Meta to pay $5 billion, implement new privacy oversight and obtain independent privacy assessments.

In May, the FTC initiated a proceeding to add new settlement terms -- including ones banning Meta from using minors' data to fuel ad targeting or algorithms, and prohibiting 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. 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 justified revisions to the 2020 order.

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

Meta opposed that request on several grounds. First, the company argued that the 2020 had been approved by a judge, and therefore could only be modified by a judge. U.S. District Court Judge Timothy Kelly rejected that argument, ruling that he lacked jurisdiction over the settlement conditions. Meta is currentlyu appealing that ruling to the D.C. Circuit Court of Appeals.

Last month, Meta filed a separate lawsuit claiming that the FTC's structure is unconstitutional.

The FTC recently urged Moss to dismiss that lawsuit for several reasons. Among others, the agency says Meta waived its argument about the FTC's constitutionality by agreeing on previous occasions to enter into settlements.

“Over the past decade, Meta has repeatedly admitted that the FTC may lawfully enter and modify administrative orders, and has repeatedly taken actions inconsistent with the constitutional arguments Meta now asserts,” the agency wrote.

Meta disputes that interpretation.

“Meta agreed to settle two prior actions with the Commission, agreeing to forgo its defenses -- both on the merits of the Commission’s claims and the Commission’s authority to assert them -- as part of larger compromises,” the company writes. “Now that the agency, for the first time, is no longer acting on an agreed basis, Meta is properly and lawfully exercising its right to assert a going forward structural challenge.”