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The novel settlement terms \u2014 which are still subject to approval by a judge \u2014 indicate the latest effort by the FTC to crack down on companies that violate kids\u2019 privacy or otherwise harm them. The commission has issued several complaints involving the Children\u2019s Online Privacy Protection Act (COPPA), including against Fortnite<\/em>-maker Epic Games<\/a>, Microsoft\u2019s Xbox<\/a>, and a weight loss app from Weight Watchers marketed to kids<\/a>. But banning a company from offering their app to kids sets this settlement apart.<\/p>\n<\/div>\n NGL is an app where users can solicit anonymous messages or questions from peers. On its Google Play Store page<\/a>, it encourages users to share their NGL link in their Instagram bio \u201cTo get even more messages.\u201d The FTC and LA DA\u2019s office accused NGL and its two co-founders of tricking young users into signing up for the paid version of the service by sending fake messages that seemed to be from real people and falsely promising that paying would reveal the senders\u2019 identities. But when users signed up for as much as $9.99 per week, they were only given \u201chints\u201d as to the senders\u2019 identities, the complaint alleges. NGL\u2019s product lead allegedly wrote \u201cLol suckers\u201d in a text with the company\u2019s co-founders in response to a customer complaint that the paid version doesn\u2019t actually show who sent certain messages.<\/p>\n<\/div>\n NGL also falsely claimed it could filter out cyberbullying and other harmful messages through artificial intelligence content moderation tools, according to the enforcers\u2019 complaint. They allegedly marketed the app as a \u201cfun yet safe place\u201d for \u201cyoung people … to share their feelings without judgment from friends or societal pressures\u201d and challenged Apple\u2019s suggestion that the app should not be rated for individuals \u201c12+.\u201d But in reality, according to the complaint, cyberbullying was \u201crampant\u201d on the service, and the company allegedly received consumer complaints of self-harm and suicide attempts that users blamed on experiences on the NGL app.<\/p>\n<\/div>\n The app also allegedly violated the COPPA Rule by failing to get parents\u2019 consent for kids under 13 on the service or honoring their requests to delete their kids\u2019 data. In addition to the age-gating terms, NGL agreed to pay $5 million to settle the charges. <\/p>\n<\/div>\n \u201cAfter nearly two years of cooperating with the FTC\u2019s investigation, 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,\u201d NGL co-founder Joao Figueiredo said in a statement. \u201cWhile we believe many of the allegations around the youth of our user base are factually incorrect, we anticipate that the agreed upon age-gating and other procedures will now provide direction for others in our space, and hopefully improve policies generally.\u201d<\/p>\n<\/div>\n The commissioners voted 5-0 to file the complaint and settlement order. But the two Republican commissioners made clear their belief that Section 5 of the FTC Act, which bars deceptive business practices, cannot necessarily be used against any anonymous messaging app marketed to kids. In a concurring statement<\/a>, Republican Commissioner Andrew Ferguson wrote that he supports the complaint against NGL and believes the app\u2019s \u201calleged conduct, tailormade to manipulate the vulnerable teenage psyche, was reprehensible and unfair.\u201d But, he added, \u201cit does not follow that Section 5 categorically prohibits marketing any anonymous messaging app to teenagers.\u201d Fellow Republican Commissioner Melissa Holyoak joined the statement.<\/p>\n<\/div>\n The Republican commissioners\u2019 statement is significant at a time when states across the country are passing laws to age-gate parts of the internet. The Supreme Court recently agreed to take up a case dealing with a Texas age verification law<\/a>. Ferguson warned that interpreting any law to categorically ban anonymous messaging services to minors, \u201cwould create grave constitutional concerns.\u201d He added that there are \u201creal benefits\u201d to allowing teens anonymity online, including protecting them from the cancel culture \u201cmob.\u201d He also said Holyoak \u201ccorrectly observes that it can be used to encourage at-risk teenagers to reach out for help that they might not otherwise feel comfortable seeking.\u201d<\/p>\n<\/div>\n