The case for the FTC to rein in Big Tech for online safety
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Do we even need new laws to boost children's safety online? From American Public Media, this is Marketplace Tech. I'm Novosafo. I want to introduce you to someone who answers the question I posed with a yes and a no.

That someone is Haley Hinkle. She's policy counsel at the advocacy group Fair Play. And not too long ago, she formulated a case brought to the Federal Trade Commission. Hinkle says that in the absence of comprehensive federal policy, there are powers already afforded to the FTC to impose new children's safety regulations on Internet companies. Hinkle points to Section 5 of the FTC Act, which prohibits, quote,

unfair or deceptive acts or practices in or affecting commerce, close quote.

The FTC's policy statement on unfairness, which is not a new policy statement, it's actually from the 1980s, sets out three criteria for addressing a business act or practice as unfair. It has to result in substantial consumer injury. The injury can't be outweighed by any countervailing benefits to consumers or competition, and the injury cannot be reasonably avoided by consumers.

And so that three-part test fits, frankly, very nicely with scrutiny of some of the design practices that we see big tech using to keep kids online, spending more money, creating more data.

What are those practices? You've mentioned doom scrolling, autoplay, things like that, gamification in general. Yeah, absolutely. Absolutely. Time maximizing practices, including endless scroll, autoplay on video games, things like loot boxes and gambling like mechanisms, quantified popularity metrics. So things like like counts and follower counts are also very potent sort of engagement maximizing tool for kids.

And why would the FTC be able to limit those or change those practices specifically as it pertains to children? Yeah, I think it's the FTC has the authority here because of the combination of the sort of nakedly manipulative design and business choices that these companies have made in order to keep all

all of our eyeballs on the screen, but particularly young children. And then combined with the negative impacts we're seeing on children and families and the incredible difficulty that parents are having trying to protect their kids from excessive screen time and just the fact that kids are developmentally really not able to defend against such sophisticated design techniques.

Nevertheless, the authority you're alleging that the FTC has, it would be relatively broad. Wouldn't Congress really need to act when it comes to that kind of broad-based authority for the FTC to regulate an industry? Yeah.

No, I mean, not necessarily. Congress has already given the FTC under Section 5 of the FTC Act this unfairness authority. The Children's Online Privacy Protection Act is actually a subset of that authority.

But no, we've seen the FCC already start to exercise this particular part of the tools in its toolbox to get at some of these issues. Somewhat recently, they brought a case against Epic Games for conduct in Fortnite where they were defaulting child accounts online.

to voice and text chat with others in the game by default. There were some COPPA violations going on there as well, but they found that kids were being exposed to really quite severe bullying and pro-suicide content, hate speech,

through that default design choice. And there was a huge settlement with Epic Games as a result of that investigation and complaint. So it's really not far-fetched to say that the agency that's supposed to protect consumers from practices that are unfair and manipulative can use the authorities it always has to address more modern techniques. We'll be right back.

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Right now, with zero commitment, try OCI for free. Head to oracle.com slash marketplace tech. That's oracle.com slash marketplace tech. You're listening to Marketplace Tech. I'm Nova Safo. We're back with Haley Hinkle, policy counsel at the nonprofit Fair Play. She recently made the case for the FTC to step in and more broadly regulate children's online safety, pointing to unfair trade practices powers afforded to the agency.

You mentioned the FTC has done this before with the Epic Games case in terms of like using that unfair practices authority that it has. That was a very limited case, though, and was very specific. If the FTC has had this broad power for a while, why hasn't it acted more often or more broadly over decades, over successive administrations, both Republican and Democrat?

I think we have seen increasing activity addressing kids' online safety and privacy issues over the last couple of administrations. Certainly the first Trump administration, the Biden administration, we are seeing increasing attention. I think, frankly, the Federal Trade Commission is an under-resourced agency that could really use more manpower. I think we see a fair number of their kids online

Online cases are partnered with state attorneys general or, for example, the Los Angeles District Attorney's Office. And so it seems that they are taking advantage of opportunities to partner with other enforcers that also have some of these same legal authorities. But, you know, I think that writ large, the federal government has been trying to figure out how to catch back up with social media and gaming platforms and

And we've seen a bit of a ramp up from the Federal Trade Commission over the last several years. And at Fair Play, we are always pushing them to be doing more. And the Kids Online Safety and Privacy Act, it's a bill that's trying to address some of these same issues. You know, it's now introduced into Congress for the fourth time. Are you counting votes? One. And how does it support your goals?

Yes. COSA, the Kids Online Safety Act and the Children's Online Privacy Protection Act were packaged together last year into the Kids Online Safety and Privacy Act. And that's how they passed the Senate floor. I don't think we are, you know, in terms of the question on counting votes, we've just had reintroduction in the Senate, are highly anticipating reintroduction.

the House to move forward and take action on these pieces of legislation as well. They are really critical for this effort.

So we have not had comprehensive online safety policy passed since the 90s. The Kids Online Safety Act is really a safety by design-based approach to addressing big tech business practices when it comes to children and teens. And the Children and Teens Online Privacy Protection Act is really focused at data privacy. And we really see both of those pieces and giving the FTC new authority on both the design and the data privacy side of things as well.

as essential to expanding protections for young people online. That was Haley Hinkle, Policy Counsel at the nonprofit Fair Play. There are arguments to be made against broad government regulation of internet companies and for putting the onus on parents to keep their children safe online. We'll have links to that and other coverage, as well as Hinkle's essay on FTC powers. That's all on our website, marketplacetech.org. Jesus Alvarado produced this episode. I'm Nova Sapo, and that's Marketplace Tech.

This is APM.