Court Rejects Meta's Claim That FTC Hearings Violate Constitution

Meta Platforms is unlikely to succeed with its claim that the Federal Trade Commission's structure -- including its ability to conduct in-house hearings -- is unconstitutional, a federal judge said this week.

The ruling, issued late Thursday by U.S. District Court Judge Randolf Moss in Washington, D.C., marks another defeat for Meta in its bid to derail an administrative hearing that could result in an order prohibiting the company from monetizing teens' data.

Earlier this week, a federal appellate court rejected a separate request by Meta to prevent the FTC from moving forward.

Moss's ruling comes in a complaint filed by Meta last November, when it claimed that FTC administrative hearings -- at which the agency serves as both prosecutor and judge -- deny companies of due process of law. Among other arguments, Meta said such hearings deprive it of a constitutional right to a jury trial.



The tech company brought the case in an effort to prevent the FTC from attempting to modify a 2020 settlement of charges that it allowed Cambridge Analytica and other outside developers to access users' data. That deal, which was approved by U.S. District Court Judge Timothy Kelly in Washington, D.C., required Meta to pay $5 billion, implement new privacy oversight and obtain an independent assessment of the program.

Last May, the FTC proposed modifying the 2020 settlement by adding terms prohibiting Meta from using minors' data to fuel ad targeting or algorithms. (Meta currently allows marketers to send targeted ads to teens based on their age and location.)

The FTC also proposed prohibiting Meta from launching new products or services, unless an assessor confirmed that Meta's privacy program doesn't have weaknesses.

When the agency put forward the new terms, it demanded that Meta appear at an in-house administrative proceeding -- similar to a trial, but in front of the agency instead of a federal court.

Since then, Meta has repeatedly urged judges to halt that proceeding. 

First, the company argued in a lawsuit filed in June that the 2020 settlement could only be revised by Kelly given that he had approved the deal. Kelly rejected that argument in November, and the D.C. Court of Appeals upheld Kelly's decision this week.

Immediately after Kelly refused to block the FTC's hearing, Meta alleged in a separate lawsuit that the FTC's structure is unconstitutional, and sought an injunction on that basis.

Moss said Thursday that Meta's constitutional arguments in that lawsuit “run head-on into controlling Supreme Court precedent to the contrary.”

For instance, Moss wrote, the Supreme Court ruled in 1975 that the same state medical board could decide whether a doctor engaged in misconduct, and whether the doctor should be suspended as a result.

Moss also said Meta hadn't shown it would suffer “irreparable injury” if the FTC moved forward with the in-house hearing.

On Friday, Meta appealed Moss's decision to the D.C. Circuit Court of Appeals.

A company spokesperson reiterated Friday that Meta believes the FTC's allegations regarding the company's privacy practices are “without merit.”

“Since 2019, we have invested more than $5.5 billion in a rigorous privacy program that has embedded privacy into our products from the start,” the spokesperson stated. “We remain committed to investing in privacy programs that protect people’s privacy and we will continue to vigorously fight the FTC’s baseless and unlawful action.”

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