FTC must probe Facebook for violating children's privacy with unfair and deceptive business practices, groups urge

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FTC reportedly planning 'record-setting' fine on Facebook for mishandling user data

Brett Larson reports on what the future holds for the social media giant.

A coalition of 16 consumer groups on Thursday called on the Federal Trade Commission to investigate whether Facebook engaged in unfair and deceptive business practices in violation of a major children's privacy law.

This latest complaint to the FTC, which is already probing a range of the tech giant's business practices, is in response to documents unsealed from a 2012 class action lawsuit that was settled in 2016.

Internal Facebook documents released in response to a Freedom of Information request by the Center for Investigative Reporting reportedly revealed the company was knowingly tricking children into making in-game purchases and made refunds almost impossible to receive with a complicated bureaucratic process.

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Advocates want the FTC to examine whether Facebook employed unfair business practices by charging children for purchases made without parental consent. Common Sense Media, a nonprofit advocating for child health, and the other organizations filing the complaint, also want the federal agency to investigate whether Facebook violated the Children's Online Privacy Protection Act (COPPA), which makes it unlawful for any operator of a website or online service directed at children to collect personal information from a child" without verifiable parental consent.

"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, in a statement. "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."

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Josh Golin, the executive director of Campaign for a Commercial-Free Childhood, which also supports the FTC complaint, said: "Facebook's scamming of children is not only unethical and reprehensible — it's likely a violation of consumer protection laws."

Facebook CEO Mark Zuckerberg testified in Washington in 2018 but did not appear before British lawmakers. (AP)

The FTC complaint comes days after a British fake news report called the social network and its leadership "digital gangsters" and the FTC is reportedly negotiating a multi-billion dollar settlement with Facebook.

When contacted by Fox News for comment on the complaint, a Facebook spokesperson provided the following statement:

“We want people to have safe and enjoyable gaming experiences on Facebook, so providing resources to seek refunds for unauthorized purchases made in games is an important part of the platform. We have in place mechanisms to prevent fraud at the time of purchase and we offer people the option to dispute purchases and seek refunds. As part of our long history of working with parents and experts to offer tools for families navigating Facebook and the web, Facebook also has safeguards in place regarding minors’ purchases. In 2016, we updated our terms and now provide dedicated resources for refund requests related to purchases made by minors on Facebook, including special training for our reviewers.”