The Federal Trade Commission (FTC) has imposed a landmark ban on the anonymous social messaging app NGL, preventing it from being marketed or offered to users under the age of 18.
Announced on Tuesday, July 9, this decision is part of a $5 million settlement following allegations that NGL engaged in deceptive practices and exposed minors to cyberbullying and harassment.
Marketing to Minors with False Claims
Launched in 2021, NGL became popular for allowing users to post links on social media for friends to send anonymous questions. However, the FTC and the Los Angeles District Attorney’s office claim that NGL targeted minors with false claims about its AI moderation system, which could filter out harmful messages and prevent cyberbullying.
The FTC’s complaint reveals that NGL sent fake, provocative messages such as “Are you straight?” and “I know what you did” to users. Users believed these messages came from real friends, prompting them to pay $9.99 monthly for hints about the senders’ identities.
However, the provided hints were vague, often including only the message’s timestamp, the sender’s general location, and whether they used an iPhone or Android device. This bait-and-switch tactic led to unexpected recurring charges that were difficult to cancel.
In 2022, TechCrunch experienced this deception firsthand. After posting an NGL link for a brief moment on Instagram, they received several questions from purported users, despite the link not being live long enough for anyone to see it. This confirmed the FTC’s findings that NGL resorted to generating fake questions to spur interest and drive subscriptions.
Violations of COPPA and Data Mismanagement
The FTC also accused NGL of violating the Children’s Online Privacy Protection Act (COPPA). This law requires apps directed at or knowingly used by children under 13 to inform parents about the personal information collected from their children and to obtain parental consent. NGL allegedly failed to verify users’ ages, did not honor parents’ requests to delete children’s data, and retained children’s data longer than necessary.
FTC Chair Lina Khan stated, “NGL marketed its app to kids and teens despite knowing that it was exposing them to cyberbullying and harassment.” As part of the settlement, NGL must implement an age gate to prevent users under 18 from accessing the app, delete all data associated with users under 13, and avoid making false claims about its AI capabilities. The company is also required to obtain explicit consent from consumers before billing for subscriptions and ensure easy cancellation of recurring charges.
According to the complaint, NGL’s business model prioritized growth over user safety and ethics. One of the most disturbing allegations involved Figueiredo directing employees to target “popular” high school cheerleaders on Instagram to attract more users. This practice not only exploited minors but also led to severe consequences, with one user reportedly attempting suicide due to their experience on NGL.
Settlement Terms and Future Implications
Under the settlement terms, NGL and its co-founders have agreed to several conditions:
- $5 Million Payment: NGL will pay $4.5 million for consumer redress and a $500,000 civil penalty to the Los Angeles District Attorney’s office.
- Age Gate Implementation: The app must implement an age gate to prevent users under 18 from accessing it.
- Data Deletion: NGL must delete all data associated with users under 13.
- Truthful Representation: The company is prohibited from misrepresenting the origins of messages and making false claims about its AI content moderation capabilities.
- Billing Transparency: NGL must obtain explicit consent from consumers before billing them for subscriptions and make it easy to cancel recurring charges.
Response from NGL
NGL responded to the settlement by releasing a statement in a blog post, “After nearly two years of cooperating with the FTC’s 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. While 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.”
This ruling by the FTC represents one of the most significant actions taken under Chair Lina Khan, aiming to prevent social media services from exploiting children for profit.
Featured Image courtesy of NGL