Groundbreaking settlement bans popular app from hosting young teens

FTC and Los Angeles District Attorney Ban Controversial App for Minors Amid Cyberbullying Concerns

The Federal Trade Commission (FTC) and the Los Angeles District Attorney’s Office have taken a bold step by banning the anonymous messaging app, NGL, from being accessible to users under 18. This move comes in response to what regulators have termed rampant cyberbullying and threats against children and teenagers on the platform.

FTC’s Aggressive Stance on Consumer Data Protection

This latest action is part of the FTC’s broader campaign to crack down on social media companies, data brokers, and other businesses accused of mishandling consumer data or making exaggerated claims about artificial intelligence. As part of the settlement announced on Tuesday, NGL is required to pay $5 million and implement an age gate to prevent access to users under 18.

The regulators cited NGL’s misrepresentation of itself as a “safe space” for teens, while in reality, it preyed on them. The lawsuit not only targets the app but also its co-founders, emphasizing the FTC's commitment to holding individual corporate leaders accountable.

NGL’s Controversial Practices Exposed

The investigation revealed that NGL actively marketed itself to young users and violated federal laws designed to protect children's data. The lawsuit described how NGL employees mocked paying users while profiting from them. Despite NGL co-founder Joao Figueiredo's claims of cooperation with the FTC, he disputed the agency’s findings. Figueiredo noted, “We view this resolution as an opportunity to make NGL better than ever for our users and we think the agreement is in our best interest.”

Pending approval by the US District Court for the Central District of California, the settlement will soon take effect. The lawsuit details how NGL deceptively lured teens into subscribing to its premium service by sending them fake, anonymous messages, promising to reveal the sender after payment. The auto-generated messages preyed on teens’ social anxieties or aspirations, with phrases like “I know what you did” and “I’ve had a crush on you for years.”

Regulatory Response and Future Implications

Behind claims that the app was a “safe space for teens” protected by AI-based content moderation, the co-founders allegedly ridiculed users who reported issues. This lawsuit stands as a testament to FTC Chair Lina Khan’s focused efforts on regulating digital data usage and protecting consumer privacy.

Recently, Khan has proposed multiple regulations aimed at curbing businesses’ data collection practices. Among these is an effort to update a landmark children's privacy law. In a prior high-profile case, the FTC fined the maker of “Fortnite” $520 million for deceptive practices.

Increasing Legislation on Social Media Use

This unprecedented action by the FTC comes amid a flurry of state legislation intended to limit minors’ access to social media. New laws in New York, Arkansas, Utah, and other states seek to regulate how social media companies handle teenage users. However, these laws face opposition on First Amendment grounds and await a Supreme Court ruling on the matter.

Public and Advocacy Group Reactions

FTC Commissioner Andrew Ferguson described the move against NGL as a novel application of the agency’s authority. In a statement, he clarified that the lawsuit should not be interpreted as a general ban on anonymous messaging apps for teens but targeted behavior that manipulates the vulnerable teenage psyche.

The FTC praised consumer advocacy group Fairplay and social media critic Kristin Bride for their invaluable assistance in the investigation. Last year, Bride shared her tragic personal story with Congress, which helped to shine a light on the risks social media poses for teens. She later called for an investigation into NGL’s practices.

Commenting on the outcome, Bride stated, “It is unconscionable that NGL would not only charge vulnerable teens for useless hints as to who was messaging them but that the developers themselves were sending harassing messages to teens and joking about it.”

This settlement marks a significant victory in the ongoing struggle to protect minors from online exploitation and sets a precedent for future regulatory actions.