The Federal Trade Commission has banned the anonymous messaging app NGL from hosting users under 18, the first time it has ordered a digital platform to stop serving minors.
The FTC and the Los Angeles County District Attorney’s office had alleged in a lawsuit that the app unfairly marketed to kids and falsely claimed that its artificial intelligence-powered content moderation system prevented cyberbullying. It also accused the app of engaging in deceptive business practices in marketing its premium subscription plan, NGL Pro.
NGL Labs, which owns NGL, and app co-founders Raj Vir and Joao Figueiredo settled the lawsuit Tuesday, the FTC and the DA's office said in a news release. In addition to implementing an age restriction, the company and its founders will pay $5 million as part of the settlement.
“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,” Figueiredo said in an email statement. “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.”
The California-based messaging app, the name of which riffs off the term “not gonna lie,” launched in 2021. It touted itself as “a fresh take on anonymity," allowing users to post questions on their social media platforms that would prompt followers to respond anonymously.
It quickly became popular among teens and claimed to be a “safe space” for them. However, NBC News has reported that slurs and harassing language were able to surpass the app’s language filters.
“NGL marketed its app to kids and teens despite knowing that it was exposing them to cyberbullying and harassment,” FTC Chair Lina M. Khan said in a news release.
The FTC and the Los Angeles County DA’s complaint also claimed that NGL violated the Children’s Online Privacy Protection Act, which requires companies serving kids under 13 to disclose what personal information is being collected and to get verified parental consent.
Los Angeles County DA George Gascón said the charges against NGL “send a clear message that deceptive practices and targeting vulnerable populations will not be tolerated.”
“We cannot tolerate such behavior, nor can we allow companies to profit at the expense of our children’s safety and well-being,” he said in a news release.
The complaint alleges that NGL deceived users by sending fake messages and questions to drive engagement. The FTC and the Los Angeles County DA found that numerous consumers found the fake messages “harassing.”
The complaint further alleges that NGL prompted users to subscribe to NGL Pro to reveal the identities of anonymous message senders, even if the messages were fake. NGL Pro also did not reveal the exact identities of senders; rather, it sent “hints” about them, including their phone models and approximate locations, according to the lawsuit.
The FTC and the DA’s office called that a “bait-and-switch tactic.” They also said many consumers were unaware that NGL Pro, which costs up to $9.99 per week, was a recurring weekly charge, which violates the Restore Online Shoppers’ Confidence Act. The act requires companies to disclose the terms of transactions and obtain users’ informed consent for charges.
The FTC said in a news release that $4.5 million of the settlement will be used to provide redress to consumers. Meanwhile, $500,000 will be paid as a civil penalty to the DA’s office.
