When President Joe Biden appointed Lina Khan as the head of the Federal Trade Commission (FTC) last June, tech companies started getting nervous, and for good reason. A law professor with no prior administrative experience, Khan was known as an outspoken critic of big tech, specifically Meta
Since Khan took the job heading up the agency, the FTC has made big moves, and it's clear that it's just getting started.
Along with revisions to laws surrounding online marketing by influencers and bots on social media, when it comes to Meta, Facebook's parent company, the FTC isn't pulling its punches. In a recent interview, Khan said that the FTC would be willing to settle its 2020 antitrust case against then-Facebook, but added that the social media company wasn't going to like the agency's offer.
"We've laid out the relief that we think would be necessary. I think you can yourself calculate the likelihood of Facebook willingly settling for some of that relief."
Amongst other things, the FTC is requesting that a federal judge order Facebook to unwind its 2012 Instagram purchase and 2014 WhatsApp purchase. Khan suggested that, while the FTC isn't looking to needlessly waste its money on litigation, the agency is "serious about the relief that we're seeking."
However, Khan was clear that Facebook is far from the only company engaging in questionable anti-competitive actions.
"We see companies propose illegal, facially illegal mergers at an unacceptably high rate," Khan said.
According to Khan, currently, many businesses bring clearly unlawful deals to the the FTC only to propose changes as needed later on.
"I think that's the wrong approach. I think we really need to be promoting an environment where parties are coming to us with clean deals, not with deals that are facially unlawful."
In another blow against social media companies, the FTC also recently released its proposed changes to the Guides Concerning the Use of Endorsements and Testimonials in Advertising, also known as the Endorsement Guides. Along with changes to what can be considered an endorsement and how endorsement should be disclosed, the proposal states the FTC's repeated concerns about child safety online, in this case specifically regarding online marketing.
"It is difficult for children - especially younger children - to discern ads from entertainment or other content in the digital environment," the proposal reads. "It may not be apparent to [children] when influencers are being paid to promote a product featured in their video and social media posts."
Rather than suggesting changes, the FTC is requesting comments from the public and plans to "hold a public event" to gain information and expert insights on child development and understanding, as well as the efficacy of endorsement disclosures for young viewers.
However, kids aren't the only ones who can be fooled by online advertising, and the FTC proposal includes several changes intended to update the Guide for the social media age.
"When a social media user tags a brand in a post," the proposal reads, "it generally communicates that the poster uses or likes the brand, so, the revised definition [of endorsement] would also indicate that tags in social media posts can be endorsements."
Along with including tags in posts, the proposal also clarifies that promoting brands is another form of endorsement, along with promoting other goods and services. On the other hand, the proposal states that paid negative statements are not considered endorsements, though they could be considered a deceptive practice. With its proposed updates, the FTC also wants to make it more clear what can and cannot be considered a "clear and conspicuous" disclosure.
The FTC also used the proposal to chime in on the recent hot topic of social media bots. The proposal suggests that the Guides should prohibit bots and "other fake social media accounts" from marketing products or services.
"It is a deceptive practice for users of social media to purchase or create indicators of social media influence and then use them to misrepresent their influence for a commercial purpose," the proposal states.
The Guide proposal and Khan's comments come following a series of blows to parental trust in online privacy and the safety of social media platforms. Meta was exposed last fall for covering up the serious harm Meta's Instagram can cause to young people. Soon after, Congress held a hearing with big tech executives to grill them for privacy threats to kids online. In 2022, mass shootings related to social media have also placed the spotlight on Meta and companies like it.
