Groups accuse Facebook of duping kids
WASHINGTON — More than a dozen children’s advocacy groups have accused Facebook of knowingly deceiving children into racking up fees from games on its social network, the latest in a string of complaints against the Menlo Park company sent to federal regulators.
The groups called on the Federal Trade Commission to investigate whether Facebook violated consumer protection and child privacy laws by duping children into making in-app purchases in games like “Angry Birds,” “PetVille” and “Ninja Saga,” and then making it nearly impossible for children or their parents to seek refunds. The accusation stems from a 2012 lawsuit.
The complaint, filed Thursday by 17 groups including Common Sense Media of San Francisco, Campaign for a Commercial Free Childhood and the Center for Digital Democracy, says the purchases were often done without a parent’s permission. In some cases, they amounted to thousands of dollars.
“Facebook’s exploitative practices targeted a population universally recognized as vulnerable — young people,” the groups said in the complaint.
In Washington’s greater focus on the power of Big Tech, Facebook has taken center stage. The company’s role in statesponsored election interference, harmful content and privacy violations has set off a push for new privacy laws and multiple investigations of the company. Next week, Congress will debate proposals for a federal privacy law.
The FTC started investigating Facebook in March after the New York Times reported that the data of tens of millions of Facebook users was unknowingly shared with political consulting firm Cambridge Analytica. The agency is in the final stages of that investigation, with staff members and Facebook negotiating over a potential settlement that could include a multibillion-dollar fine and new restraints on the company’s business practices, according to people familiar with the talks.
The consumer groups do not believe the complaint will be included in the FTC’s privacy investigation of Facebook, because that case appears to be nearing its completion.
But the children’s advocacy groups said they hope their complaint will continue a drumbeat of pressure for Facebook to take more forceful steps to change its business practices oriented toward children.
“This is a pattern of behavior,” said Jim Steyer, CEO of Common Sense Media. “Facebook has a moral obligation to change its culture towards practices that foster the well-being of kids and families, and the FTC should ensure Facebook is acting responsibly.”
Facebook said that in 2016 it had updated some of its policies governing purchases by minors.
“We have in place mechanisms to prevent fraud at the time of purchase, and we offer people the option to dispute purchases and seek refunds,” the company said. “As part of our long history of working with parents and experts to offer tools for families navigating Facebook and the web, Facebook also has safeguards in place regarding minors’ purchases.”
The FTC declined to comment.
Details about the inapp purchases came from court documents that were unsealed at the request of the Center for Investigative Reporting, a nonprofit journalism organization. The documents were part of a class-action lawsuit brought in 2012 and settled in 2016 for an undisclosed sum.
The 135 pages of unsealed documents included internal memos and emails in which Facebook employees encouraged game developers to create features that would get children to make credit card charges while playing games. In many cases, the children did not realize that their parents’ credit cards were attached to the games or that they were spending real money, the consumer groups argued in their complaint.
The FTC polices consumer fraud, deception and unfair practices and is well versed in the issue of in-app purchases — the charges made within an app and directly charged through iTunes or Google Play stores, for example.
In 2013, the agency started an investigation into major charges by children using in-app purchases for things like “gold coins” in smartphone games. The FTC reached a $32.5 million settlement with Apple and a $19 million settlement with Google over accusations that children were deceived into making such purchases and that the companies did not properly disclose to parents that they were being charged for their children’s purchases.