Amazon, TikTok, Facebook, Others Ordered To Explain What They Do With User Data

Updated Wednesday at 6:30 a.m. ET

The Federal Trade Commission is demanding that nine social media and tech companies share details on how they harness users' data and what they do with the information.

Amazon.com, TikTok owner ByteDance, Discord, Facebook, Reddit, Snap, Twitter, WhatsApp (also owned by Facebook) and YouTube were sent orders by the FTC on Monday to provide the commission with details on their data collection and advertising practices. The companies have 45 days to respond to the order.

In a statement to NPR, a representative for Discord said it "takes user privacy very seriously" and that the company looks forward to answering FTC's questions. They added that the company makes no money from advertising, selling user data, or sharing users' personal information with others.

Representatives for the other companies didn't respond to NPR's request for comment.

The inquiry is the latest move by federal regulators to crack the whip on Big Tech in an attempt to monitor their activities. Increased scrutiny by federal and state officials this year has pushed major social media websites and apps to answer for perceived improper uses of consumer data and violations of federal anti-monopoly law.

This order comes just a week after the FTC and 48 attorneys general across the country filed lawsuits against Facebook, accusing the social media giant of unlawfully maintaining a monopoly. The company has denied this claim.

The FTC's request for information covers a wide scope in order "to understand how business models influence what Americans hear and see, with whom they talk, and what information they share." The agency is using its authority under Section 6(b) of the FTC Act, which allows it to undertake broad studies separate from law enforcement.

"Critical questions about business models, algorithms, and data collection and use have gone unanswered. Policymakers and the public are in the dark about what social media and video streaming services do to capture and sell users' data and attention," FTC Commissioners Rohit Chopra, Rebecca Slaughter and Christine Wilson said in a statement. "It is alarming that we still know so little about companies that know so much about us."

The commission wants the tech companies to detail how many users each company has, how active they are and what else is known about them. The inquiry also asks the social media and video streaming companies to hand over information on how they process the data collected and how advertising and engagement practices impact young, underage users.

The commissioners voted to issue Monday's orders in a 4-1 vote. Republican Commissioner Noah Joshua Phillips dissented.

In a statement, Phillips wrote, "The breadth of the inquiry, the tangential relationship of its parts, and the dissimilarity of the recipients combine to render these orders unlikely to produce the kind of information the public needs, and certain to divert scarce Commission resources better directed elsewhere."

Big Tech scrutiny

Lawmakers and civil and consumer rights groups have placed Big Tech under the microscope this year in particular, following revelations showing questionable practices by major websites and apps.

The Wall Street Journal has reported on how apps share user information with Facebook. The newspaper also recently revealed that Amazon was scooping up data from independent sellers and using it to create its own competing products. Amazon executives have denied this.

This summer, Facebook's Mark Zuckerberg, Amazon's Jeff Bezos, Google's Sundar Pichai and Apple's Tim Cook testified virtually before Congress about Silicon Valley's perceived monopoly power.

During this hearing, Bezos acknowledged the $1 trillion company may be misusing data to push out independent sellers. He said the company is undergoing an internal investigation into the matter.

This year alone has brought major lawsuits against tech companies. In addition to the blockbuster lawsuit filed against Facebook last week, the U.S. Justice Department and 11 states sued Google, alleging the company violated competition law.

How these companies interact with underage users and what information gleaned from their activity has also been the subject of litigation.

In August, the parents of dozens of minors sued TikTok in federal court, alleging that the popular video-sharing app collects information about their users' facial characteristics, locations and close contacts. The company then sends that data to servers in China without users knowing and it is potentially shares it with the Chinese Communist Party, the lawsuit alleges.

The Trump administration considers TikTok a national security threat because the parent company is based in China, and it shares concerns that information from U.S.-based users is being collected by Beijing. TikTok denies these allegations but says it can share user information to its servers, if it chooses to, without breaking U.S. law.

Civil rights groups and consumer groups are urging regulators to go further and examine popular dating apps Grindr, Tinder and OKCupid.

The Norwegian Consumer Council published a report in January showing 10 apps collected sensitive information including a user's exact location, sexual orientation, religious and political beliefs, drug use and other information in a practice called "data harvesting." The apps then transmitted the personal data to at least 135 third-party companies.