The Federal Trade Commission (FTC) took a historic step by prohibiting the online messaging platform NGL from catering to users younger than 18.

The agency said that the app had caused damage to children and teens and breached consumer protection and child privacy regulations. 

NGL Labs to Pay $4.5 Million Settlement

On Tuesday, July 9, the FTC announced that it reached a settlement with NGL Labs, the app's developer, about its consumer protection and privacy breaches.

Despite NGL Labs's best efforts to promote the app as a "safe space for teens" with strong moderation measures, authorities claimed that the app put users at risk of cyberbullying and other dangers.

According to the New York Times, NGL settled for $4.5 million to compensate victims of its business practices. In addition to the extra $500,000 civil penalty levied on NGL, the settlement was made in conjunction with the Los Angeles District Attorney.

As stated in the settlement, the agency allegedly discovered several misleading practices using NGL. In its 2021 advertisement for NGL, the firm erroneously claimed that the service's artificial intelligence features protected young users from cyberbullying and other harmful online behaviors.

According to the FTC, the company did not live up to its claims as it still exposed users to cyberbullying and other harms. As part of its strategy to attract visitors to the site, NGL allegedly sent out phishing emails that seemed to originate from actual individuals.

Additionally, NGL deceived customers into paying a $9.99 monthly charge to find out who sent them the messages but did not disclose those identities.

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Growing Concerns About Online Child Safety

Legislators and regulators are increasingly concerned about protecting children on the internet. Last month, the Surgeon General advocated for a health warning label on children's and teens' social media accounts. However, this would require a legislative act to be made mandatory.

Also causing a stir among lawmakers is the Kids Online Safety Act, which would mandate that all online platforms take measures to safeguard children from inappropriate content and establish the highest level of privacy as the default for all young users.  

To safeguard children's privacy and consumer rights, the FTC has been investigating apps and services that it claims breach these regulations.

Read More: New York Enacts Law to Restrict Algorithm-Driven Feeds for Minors on Social Media