In December 2020, the Federal Trade Commission ordered the world's largest social media and streaming companies – including Twitch owner Amazon, Facebook (now Meta), YouTube, Reddit, WhatsApp, Twitter (now X), Snap, Discord and TikTok's ByteDance – to disclose how they use their users' personal information.
On Thursday, FTC staff released a 129-page report finding that these companies “collect an enormous amount of Americans' personal information and monetize billions of dollars annually,” said FTC Chair Lina M. Khan.
“While these surveillance practices are lucrative for companies, they can compromise people's privacy, threaten their freedom and expose them to a range of dangers, from identity theft to stalking,” Khan said.
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The report accuses major social media companies of collecting vast amounts of personal data and using it in ways their users may not expect. For example, the FTC found that “many” of these companies buy data about a user's location, how much they earn per year and their interests from third-party brokers in order to learn more about a user's activity online outside of the social media platform.
This personal information forms the basis of targeted advertising, which most social media sites depend on for revenue. Meta, the parent company of Facebook, Instagram, WhatsApp and other products and platforms, said 98% of its $39.07 billion in revenue in the second quarter came from advertising on Facebook and Instagram.
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According to the FTC's report, it's difficult for users to understand how social media platforms collect their information and how much of it is used for tailored advertising. Many may not even be aware of what's happening behind the scenes.
And even if users are up to date and know that social media platforms are using their data, they still have no “meaningful control over how personal information [is] used,” the FTC report states.
Companies use personal information to power algorithms, data analytics and AI that in turn influence content recommendations, search, advertising and other important aspects of their business. The FTC recommended that companies be transparent about the data they collect, do more to protect privacy and give users control over their data.
The FTC also found that when a user requests to delete their data, some websites anonymize the existing data but keep it on file rather than deleting it entirely. The platforms that deleted personal data upon request chose which parts to delete and did not remove all of it, the report said.
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“Companies can and should do more to protect consumer privacy, and Congress should enact comprehensive federal privacy laws that limit surveillance and give consumers privacy rights,” the report said.