Appeals Court Rejects Meta's Bid To Halt FTC Hearing Over Teens' Data

A federal appeals court has again rejected Meta Platforms' attempt to halt an FTC proceeding that could lead to a ban on monetizing teens' data.

“Meta has not met its heavy burden of showing entitlement to an injunction pending appeal,” a three-judge panel of the D.C. Circuit Court of Appeals wrote in an order issued Friday afternoon.

The panel also dissolved an administrative stay issued late last week, seemingly clearing the way for the FTC to proceed with an in-house hearing against the platform.

The appellate judges said Friday that Meta isn't likely to prove the FTC's structure -- including its ability to conduct in-house hearings -- is unconstitutional.

Meta had argued that its right to due process would be violated by an FTC in-house hearing because the FTC acts as both prosecutor and judge at those proceedings.

But the appellate judges wrote that “longstanding precedent” allows an agency to act as both investigator and adjudicator.

“Evidence of actual bias, of course, would trigger constitutional concerns,” the judges wrote. “But Meta has not pointed to any objective indicia that the Commission is biased or close-minded in this proceeding.”

The panel also rejected Meta's argument that it would face “irreparable harm” if forced to defend itself at a proceeding that's later found unconstitutional.

“Meta has not shown a likelihood of any unconstitutional proceeding occurring,” the judges wrote.

Friday's ruling comes in a battle that began last May, when the FTC proposed modifying a 2020 privacy settlement by adding new restrictions on Meta.

That settlement -- which resolved allegations that Meta allowed Cambridge Analytica 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 also prohibit 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 agency also seeks to ban Meta from launching new products or services, unless an assessor confirms its privacy program doesn't have weaknesses.

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.

Meta has repeatedly said it believes the FTC's allegations are meritless.

“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,” a company spokesperson stated earlier this month.

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