FTC Proposes Crackdown on Tech Companies for Surveillance of Child Users

WASHINGTON — The Federal Trade Commission on Wednesday proposed sweeping new regulations to protect children from surveillance techniques used by internet companies.

The proposed rules could change how social media monetizes data they glean from children’s gaming, learning and internet search habits.

The Federal Trade Commission action continues a move in the federal government to clamp down on technology companies that some lawmakers say are too invasive. Much of the blame has fallen on Google as well as Meta Platforms, owner of Facebook and Instagram.

The regulation would modify the Children’s Online Privacy Protection Act that Congress approved in 1998 to prevent internet-based companies from tracking children’s preferences for social media apps, video games, toys and other services.

The internet companies transfer records of users’ preferences to help them target their ads to persons most likely to purchase their products. It’s called “behavioral advertising.”

A major change in the rules the FTC proposed would make it “illegal for companies to disclose kids’ information without first obtaining separate parental consent,” the FTC said on its website.

“That means that behavioral advertising would have to be turned off by default and parents would have the clear option to say no to behavioral advertising even if they consent to the company’s other data practices.”

Another rule would ban online services from using a child’s cell phone number to encourage them to remain on the internet platforms longer, also known as push notifications. The notifications typically consist of breaking news alerts, sports scores, weather updates, social media notifications and promotional offers.

The FTC said its proposed rules “shift the burden” for protecting children from their parents to companies that reach customers through digital services.

“Kids must be able to play and learn online without being endlessly tracked by companies looking to hoard and monetize their personal data,” FTC Chair Lina M. Khan said in a statement.

“The proposed changes to COPPA are much-needed, especially in an era where online tools are essential for navigating daily life — and where firms are deploying increasingly sophisticated digital tools to surveil children.”

The move to amend COPPA results partly out of frustration in trying to rein in internet companies and partly out of recent improvements in artificial intelligence that make their data collection more effective.

Meta Platforms Chief Executive Mark Zuckerberg and other tech executives deny they intentionally target or exploit children. They argued during congressional hearings that their search algorithms apply equally to anyone who uses digital services, which can include children.

They say they are merely trying to give advertisers the best value for their money.

Other rule changes the FTC proposes would bar internet companies from making the collection of personal data a condition of a child’s access to games, apps or other digital services.

In addition, the companies could gather only the personal information “reasonably necessary” for a child to participate in the digital services.

Members of Congress who took the lead in trying to hold tech companies accountable for surveillance of users welcomed the FTC’s proposed rules.

Sens. Ed Markey, D-Mass., and Bill Cassidy, R-La., welcomed the FTC’s update to its regulations.

“This reform could not come at a more important time,” Markey and Cassidy said in a joint statement. “Experts, parents, and young people all agree that kids are being victimized by ‘Big Tech’s’ voracious appetite for data.”

They said the FTC’s proposed rules are one step toward reform but more are coming.

They are advocates for the pending Children and Teens’ Online Privacy Protection Act, also known as COPPA 2.0. It would expand online protections for 13- to 16-year-olds, ban advertising targeted at them and set more limits on the kind of personal information companies can collect on teenage users.

“Inaction is not an option,” Markey and Cassidy said.

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