Meta Files Emergency Petition To Derail FTC Hearing On Teens' Data

Meta Platforms on Monday asked a federal appeals court for an emergency injunction halting an FTC in-house hearing that could result in a ban on monetizing teens' data.

“Meta likely will succeed on the merits of its appeal, which, at a minimum, will present serious legal questions,” the company writes in papers filed with the D.C. Circuit Court of Appeals.

The social media platform contends that FTC in-house hearings are unconstitutional -- in part, because the FTC acts as both prosecutor and judge at in-house hearings.

That dual role “entails an unacceptable risk of actual bias,” Meta argues, adding that the FTC “has a long history of upholding its own claims.”

The new bid for emergency intervention comes just days after U.S. District Court Judge Randolf Moss in Washington, D.C. turned down Meta's request to derail the FTC's in-house hearing.

Moss said in his ruling that the Supreme Court rejected arguments similar to Meta's in prior cases.

For instance, he wrote, the Supreme Court ruled nearly 50 years ago that the same state medical board could decide whether a doctor engaged in misconduct, and whether that doctor should be suspended.

But Meta notes that the Supreme Court is currently considering whether to limit federal agencies' enforcement power. In November, 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 company also says it will face “irreparable harm” if forced to defend itself at a proceeding that's later found unconstitutional.

The appeal marks the latest development in a battle that began last May, when the FTC proposed  modifying a 2020 settlement by adding new restrictions on Meta.

That 4-year-old settlement -- which resolved allegations that Meta allowed Cambridge Analytica and other outside developers to access users' data -- required Meta to pay $5 billion, implement new privacy oversight and obtain an independent assessment of the program.

The FTC now wants to add terms preventing Meta from using minors' data to fuel ad targeting or algorithms, and also prohibiting the company from launching new products or services, unless an assessor confirms its privacy program doesn't have weaknesses. (Meta currently allows marketers to send targeted ads to teens based on their age and location.)

The FTC claimed the company should be subject to new restrictions because an evaluator allegedly identified “gaps and weaknesses” in the company's privacy program, and because Meta's Messenger Kids allegedly had coding errors between 2017 and 2019 that allowed children to communicate with people who hadn't been approved by parents, in violation of representations about the feature.

When the agency set out the potential new restrictions, 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 U.S. District Court Judge Timothy Kelly in Washington, D.C. because he had approved the deal. Kelly rejected that argument in November, and the D.C. Court of Appeals upheld Kelly's decision last week.

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

Moss rejected that argument on Thursday, but stayed his order until March 22 to give Meta time to appeal.

The D.C. Circuit hasn't yet said whether it will consider Meta's emergency request.

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