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In December 2020, the Federal Trade Commission ordered the biggest social media and streaming companies in the world, including Twitch owner Amazon, Facebook (now Meta), YouTube, Reddit, WhatsApp, Twitter (now X), Snap, Discord and TikTok's ByteDance, to share how they used their users' personal information.
On Thursday, FTC staff released a 129-page report, which found that these companies all "harvest an enormous amount of Americans' personal data and monetize it to the tune of billions of dollars a year," stated FTC chair Lina M. Khan.
"While lucrative for the companies, these surveillance practices can endanger people's privacy, threaten their freedoms, and expose them to a host of harms, from identify theft to stalking," Khan said.
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The report called out major social media companies for collecting vast swaths of personal data and using it in ways their users may not expect. The FTC found, for example, that "many" of these companies buy data from third-party brokers about where a user is located, how much they make per year, and what their interests are, to understand more about a user's activity on the Internet outside of the social media platform.
This personal information becomes the basis of targeted ads, which most social media sites rely on for revenue. Meta, the parent company of Facebook, Instagram, WhatsApp, and other products and platforms, reported that 98% of its $39.07 billion revenue in its second quarter came from ads on Facebook and Instagram.
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According to the FTC report, it's difficult for users to understand how social media platforms collect their information and how much is used to tailor ads. Many may not even be aware of what's happening behind the scenes.
Plus, even if users are tuned in and know that social media platforms are using their data, they still don't have "any meaningful control over how personal information [is] used," the FTC report shows.
Companies use personal information to fuel algorithms, data analytics, and AI that, in turn, shape content recommendations, search, advertising, and other crucial aspects of their business. The FTC recommended that companies be transparent about the data they collect, do more to protect privacy, and put users in charge of data.
The FTC further found that if a user wants to delete their data, some sites will de-identify the data they have on hand, but keep it on file instead of wiping it all. The platforms that did delete personal data upon request would select which parts to delete and fail to remove all of it, according to the report.
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"Companies can and should do more to protect consumers' privacy, and Congress should enact comprehensive federal privacy legislation that limits surveillance and grants consumers data rights," the report stated.
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