Social media giants are collecting and using a lot of data, according to the FTC

The FTC criticized the data collection, minimization, and retention practices of several major companies as being highly inadequate. On Thursday, the Federal Trade Commission (FTC) released a report accusing large social media and video streaming platforms of extensive data collection and surveillance, compromising user privacy to generate enormous profits.

The 129-page report revealed that these platforms gathered massive amounts of data from both users and non-users, including children and teenagers, without providing sufficient privacy protections. The report stemmed from orders issued in December 2020 to nine companies: Amazon, Facebook, YouTube, Twitter (now X), Snap, ByteDance (TikTok's parent company), Discord, Reddit, and WhatsApp.

The FTC sought details about how these companies collect, track, and use personal data, as well as how they determine what ads and content to display to users. FTC Chair Lina M. Khan emphasized that the companies profit billions by monetizing user data, but these practices put people’s privacy at risk, leading to potential harms such as identity theft and stalking.

The FTC found that companies’ efforts to limit and delete data were insufficient. Their business models largely relied on the extensive collection of user data, especially for targeted advertising, which drives most of their revenue. In some cases, the companies obtained additional data from brokers, including information on users’ income, location, and interests.

The report also highlighted privacy-invasive tracking methods, like pixel tracking, used to target ads, with many users unaware of the extent of data collection. Aside from one company, none offered users the ability to opt out of having their data used in algorithms, analytics, or AI.

In response, some companies, like Discord, objected to the report, claiming it grouped different models together, potentially misleading consumers. Discord stated that its business model prioritizes privacy and differs from the advertising-driven focus of other platforms.

X (formerly Twitter) noted that the report referenced practices from 2020, before Elon Musk acquired the company and rebranded it. The platform now emphasizes transparency about data collection and provides options for users to control what is shared.

The FTC also addressed the issue of children using these platforms, finding that most companies had not designed their services with children in mind, yet allowed teens on their platforms without specific protections. The report called for comprehensive federal privacy legislation to safeguard consumer privacy and urged companies to limit data collection.

In response to privacy concerns, Meta (Instagram’s owner) recently introduced Instagram Teen Accounts to give parents more control over their children’s online interactions.