• by Wendy Davis  @wendyndavis, January 8, 2024

Meta Platforms is pressing a federal district court judge to stay a Federal Trade Commission administrative proceeding that could result in an order prohibiting the company from monetizing teens' data.

In papers filed late last week, Meta tells U.S. District Court Judge Timothy Kelly it will face “irreparable harm” unless he halts an administrative hearing at which the company “will be forced to litigate before its litigation adversary, and without the procedural protections inherent in federal court litigation.”

Meta's argument comes in a battle with the FTC dating to May, when the agency proposed modifying a 2020 settlement by adding terms banning Meta from using minors' data to fuel ad targeting or algorithms. At the time, the FTC served Meta with a demand to appear at an in-house administrative proceeding, following which the agency could issue the new restrictions on teens' data.

Meta sued in federal court to prevent the FTC from moving forward with the hearing, arguing that the 2020 settlement was approved by Kelly and therefore could only be modified by him or another federal judge.

Kelly rejected that argument in November, ruling that he lacked jurisdiction to intervene in the current dispute.

Meta has appealed that ruling to the D.C. Circuit Court of Appeals. The company also is asking Kelly to block the FTC from moving forward with an administrative hearing while the appeal proceeds.

“Meta’s appeal presents serious legal issues,” the company writes in its most recent papers, elaborating that it will argue “fundamental principles of contract interpretation” prohibit the FTC from attempting to unilaterally change the settlement terms.

Meta's claim centers on the structure of the 2020 consent decree, which stemmed from charges that Meta allowed Cambridge Analytica and other outside developers to access users' data. The consent decree required Meta to pay $5 billion, and also called for the company to implement new privacy oversight and obtain an independent assessment.

When the FTC sought to modify that decree in May, it alleged that an evaluator had identified “gaps and weaknesses” in the company's privacy program, and that between 2017 and 2019, Meta's Messenger Kids had coding errors that allowed children to communicate with people who hadn't been approved by parents, in violation of representations about the feature.

Meta says the 2020 settlement terms were attached as an exhibit to the 2020 “stipulated order,” and integrated into that order. The company essentially argues that when it agreed to settle the charges, it believed any change in terms could only be ordered by a court.

“Depriving Meta of its bargained-for forum and process for modification of the stipulated order and forcing it to relitigate a settlement agreement that was entered as this court’s consent decree will cause Meta irreparable harm,” the company writes.

The FTC argued in papers filed late last year that Meta can't show it will suffer irreparable harm as a result of an administrative proceeding because it will be able to appeal an administrative order to a federal court.