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Campaign for a Commercial-Free Childhood

Over a Dozen Children’s and Consumer Advocacy Organizations Request Federal Trade Commission to Investigate Facebook for Deceptive Practices

It is not just me Tilting at Windmills as some have suggested. The Facebook and related social media threats are real – especially to our children.

Contact:
David Monahan, CCFC: david@commercialfreechildhood.org; (617) 896-9397
Lisa Cohen, Common Sense: lcohen@commonsense.org; (310) 395-2544

Over a Dozen Children’s and Consumer Advocacy Organizations Request Federal Trade Commission to Investigate Facebook for Deceptive Practices

SAN FRANCISCO, CA — February 21, 2019 — Earlier today, Common Sense Media, Campaign for a Commercial-Free Childhood, Center for Digital Democracy, and over a dozen organizations called upon the Federal Trade Commission (FTC) to investigate whether Facebook has engaged in unfair or deceptive practices in violation of Section 5 of the Federal Trade Commission Act and the Children’s Online Privacy Protection Act (COPPA).

“Facebook’s practice of ‘friendly fraud’ and referring to kids as ‘whales’ shows an ongoing pattern of the company putting profits over people. Kids, under any circumstances, should not be the target of irresponsible and unethical marketing tactics,” said Jim Steyer, CEO of Common Sense Media. “Facebook has a moral obligation to change its culture toward practices that foster the well-being of kids and families, and the FTC should ensure Facebook is acting responsibly.”

The FTC complaint is in response to unsealed documents from a 2012 class action lawsuit that Facebook settled in 2016. Upon a Freedom of Information Act request filed by the Center for Investigative Reporting, internal documents at Facebook revealed the company knowingly duped children into making in-game purchases and made refunds almost impossible to obtain. Facebook employees called the practice “friendly fraud” and referred to kids who spent large amounts of money as “whales,” a casino-industry term for super high rollers.

Advocates are concerned that Facebook employed unfair practices by charging children for purchases made without parental consent and often without parental awareness. According to Section 5 of the Federal Trade Commission Act, “unfair” practices are defined as those that “cause or [are] likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition” (15 U.S.C. Sec. 45(n)). Advocates point to court documents to demonstrate substantial injury to consumers, including one teenager who incurred $6,500 of charges in just a few weeks, and request rates for refunds were 20 times higher than the usual rate of refund requests.

“Facebook’s scamming of children is not only unethical and reprehensible – it’s likely a violation of consumer protection laws,” said Josh Golin, Executive Director of Campaign for Commercial-Free Childhood. “Time and time again, we see that Facebook plays by its own rules regardless of the cost to children, families and society. We urge the FTC to hold Facebook accountable.”

Additionally, the complaint asks the FTC to investigate whether Facebook violated COPPA. Unsealed documents show that Facebook was aware that many of the games it offered were popular with children under age 13 and were in fact being played by children under 13. COPPA makes it unlawful for an “operator of a Web site or online service directed to children, or any operator that has actual knowledge that it is collecting or maintaining personal information from a child, to collect personal information from a child” unless it has obtained verifiable parental consent and provided appropriate disclosures.

Advocates are calling for the Commission to recognize the particular vulnerability of young people and investigate whether Facebook is complying with Section 5 and COPPA.

Groups signing on to the complaint include Common Sense Media, Center for Digital Democracy, Campaign for a Commercial-Free Childhood, Consumer Action, Electronic Privacy Information Center, Consumer Federation of America, Children and Screens, Badass Teachers Association, Inc., Media Education Foundation, New Dream, Parents Television Council, Peace Educators Allied for Children Everywhere (P.E.A.C.E.), Parent Coalition for Student Privacy, Public Citizen, Story of Stuff, TRUCE, and Defending the Early Years.

The full complaint can be read here.

It’s time to hold Facebook accountable

From the Campaign for a Commercial-Free Childhood -CCFC educates the public about commercialism’s impact on kids’ well being and advocates for the end of child-targeted marketing.

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In January, it was revealed that Facebook knowingly defrauded children and their families out of millions of dollars by intentionally misleading children into making in-app purchases. The company referred to children who unintentionally spent thousands of dollars as “whales,” a casino industry term for high-rollers, and refused to refund unauthorized purchases. Not only did the company not refund these unauthorized charges, they encouraged them.

As we wrote at the time, these policies and attitudes toward kids show that Facebook is unfit to make products for children. Now, we’re joining our allies at Common Sense Media, Center for Digital Democracy, and 14 other organizations, asking the FTC to investigate these clearly fraudulent and deceptive practices. Facebook has proven again and again that it will stop at nothing to increase profits, even at the expense of children.

Read our press release here, and the full text of our FTC complaint here.