On Tuesday, the Federal Trade Commission (FTC) made a groundbreaking decision by unanimously banning the social messaging app NGL from hosting minors as part of a $5 million settlement. This ban marks the first of its kind and was put in place after the revelation that NGL actively targeted children with deceptive strategies, false claims about AI moderation, and even went as far as specifically targeting “popular” kids, such as cheerleaders, to entice others onto the platform.
FTC Chair Lina Khan highlighted the alarming nature of NGL’s actions, stating that the company marketed its app to kids and teens while being fully aware that it was exposing them to cyberbullying and harassment. Due to NGL’s reckless disregard for the safety of children, the FTC’s order would ban the company from marketing or offering its app to individuals under the age of 18. Khan emphasized the FTC’s commitment to cracking down on businesses that exploit children for profit.
Collaborating with the Los Angeles District Attorney’s office, the FTC complaint paints a disturbing picture of NGL as an exploitative business that prioritized building its social network over adhering to fundamental ethical standards. While NGL may not have reached the popularity of leading platforms like Instagram and TikTok, it experienced a surge in popularity in 2022 and even briefly became the most downloaded app on the iOS App Store.
The app markets itself as a platform for anonymous messaging with unknown friends and contacts from other social channels, a premise that alone raises concerns. However, the FTC found that NGL compounded these concerns by making false claims about its use of “world class AI content moderation” employing “deep learning and pattern matching algorithms” to prevent cyberbullying and other harmful behavior. Additionally, NGL sent fake computer-generated messages disguised as messages from users’ real friends, with provocative prompts like “Are you straight?” and “I know what you did.”
Furthermore, NGL allegedly engaged in predatory practices, including bait-and-switch upsell tactics. The company promised to reveal the identity of anonymous “friends” in exchange for a weekly premium subscription fee of up to $10. However, after paying, users only received useless “hints” such as the message’s timestamp, the general location of the sender, and whether they used an iPhone or Android phone. Moreover, NGL implemented recurring charges that users did not expect and were difficult to cancel.
To make matters worse, NGL’s co-founder Joao Figueiredo allegedly instructed employees to browse through high school cheer Instagram pages to find popular kids and encourage them to post on the platform. One user even reported that their friend attempted suicide due to their negative experience on NGL. Shockingly, when consumers voiced their complaints, NGL executives reportedly dismissively referred to them as “suckers.”
Aside from these troubling practices, the FTC and Los Angeles District Attorney’s office also accused NGL of violating the Children’s Online Privacy Protection Act (COPPA) Rule, which mandates that companies alert parents about the personal information they collect from children under 13. Additionally, NGL was found to have violated the Restore Online Shoppers’ Confidence Act. The app made no effort to verify users’ ages and failed to obtain parental consent for collecting and using data from children below the age of 13. Furthermore, NGL disregarded requests from parents to delete their children’s data and retained children’s data for longer than necessary.
Under the terms of the settlement, NGL and its co-founders have agreed to pay $4.5 million to provide compensation to affected consumers and a $500,000 civil penalty to the Los Angeles District Attorney’s office. Moving forward, the company will be required to implement an age gate to prevent users under 18 from accessing the app, delete all information linked to users under 13, abstain from misrepresenting the origins of messages, refrain from making false claims about AI technology, and obtain consumer consent before charging them for subscriptions. Additionally, the company must ensure that canceling recurring charges is a straightforward process.
The FTC’s unanimous and bipartisan ruling against NGL raises questions about potential future actions that may target more prominent social media platforms engaging in similarly unethical marketing practices. By setting a precedent with NGL, the FTC may be better positioned to hold larger companies accountable for exploiting users, especially children, for profit.
In conclusion, the FTC’s ban on NGL hosting minors and the accompanying $5 million settlement hold the app accountable for engaging in deceptive marketing tactics and exposing children to cyberbullying and harassment. While the ban represents a significant step in protecting young users, there is still much work to be done in ensuring the safety and ethical behavior of social media platforms as a whole. Through further investigations and enforcement actions, it is hoped that the FTC can curtail the prevalence of unethical marketing practices in the digital landscape and create a safer online environment for all users.
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