Common Sense Media Complains Against Deceptive Practices of Facebook, Inc. (NASDAQ:FB) To The US Federal Trade Commission
Facebook, Inc. (NASDAQ:FB) gained 1.16% and closed at $161.89 in the previous trading session. Here is the latest update on the company.
Facebookagain lands in trouble because of its fraudulent and deceptive practices. The Center for Digital Democracy and Campaign for Commercial-Free Childhood, Common Sense Media filed a complaint against Facebook to the US Federal Trade Commission (FTC). It argues that Facebook violated the COPPA (online privacy protection act of children) and engages in deceptive or unfair trade practices. According to Common Sense Media, Facebook tricks the kids into making purchases when they play games on social media.
Facebook faces punishment on privacy violations
The social media giant is already under the scanner of US FTC on privacy violations and could end up paying billions of dollars soon. The US FTC conducts a probe to check whether Facebook violated the 2011 decree. According to the decree, the company should ensure the privacy of the users. The company is already facing similar probes in other nations like the UK, Germany and the US.
COPPA mandates parental consent
However, COPPA is a different issue. According to COPPA, the website should seek the nod of parents when it knowingly collects data from kids under the age of 13 years. The complainant said Facebook knows the fact that children even at 5 play the games offered on its site. According to the information revealed by the complainant on January 24, 2019, the kids spent thousands of dollars with no knowledge of their parents. They used the previously entered credit card information of their parents to make purchases without seeking permission.
It is called friendly fraud. Facebook has not implemented a fix to curb the practice because it seeks revenues. It also refuses to return the money collected from kids. Kevin Martin, Vice President (US public policy) of Facebook, in a letter to the two US senators said it does not connect with US FTC on COPPA.
Facebook allows the creation of accounts of kids aged above 13 years only to prevent the risk of unauthorized payments. Martin said friendly fraud is common in the payments industry. However, it provides training to the reviewers. It also provides a choice to dispute the purchase. The senators issued a joint statement saying Facebook knows the issue and not implemented protective mechanisms. They have not satisfied with the answer of Facebook and await a court decision. Many organizations urged Zuckerberg to remove Kids Messager Kids on Facebook. Beth Labson Freeman, the US District Judge in San Jose, California, said Facebook must face the nationwide class action, which forces the company to refund the money spent by kids with no knowledge of parents.
Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with MarketBeat.com's FREE daily email newsletter.