Not So Anonymous? NGL Reaches Settlement with FTC over Marketing, Child Privacy Concerns

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  • The FTC and Los Angeles District Attorney’s Office entered into a settlement with NGL Labs, LLC, and two of its co-founders (collectively, “NGL”), to resolve allegations that NGL violated the FTC Act, the Restore Online Shoppers’ Confidence Act, the Children’s Online Privacy Protection Rule (“COPPA Rule”), and California consumer protection laws by making false and deceptive claims in connection with the marketing of their anonymous messaging app (“NGL App”) and by collecting personal information from children under the age of 13 without proper notification and consent.
  • In the complaint, the FTC alleges that NGL actively marketed the app to children and teens despite knowing the potential harms of cyberbullying on similar anonymous messaging apps; falsely claimed that its AI content moderation program filtered out cyberbullying and other harmful messages; used fake, computer-generated messages to trick users into signing up for their paid subscription by falsely promising that doing so would reveal the identity of the senders of messages; failed to clearly disclose and obtain consent for recurring charges for its paid subscription service; and collected personal information from children under the age of 13 without parental consent.
  • Under the terms of the proposed settlement, which is subject to court approval, NGL must pay $4.5 million to the FTC for consumer redress and a $500,000 civil penalty to the Los Angeles DA’s office. Additionally, NGL is permanently banned from marketing anonymous messaging apps to anyone under 18 and is prohibited from making misleading claims about any app, including claims about AI capabilities. The settlement also requires NGL to clearly disclose recurring charges and engage in compliance reporting.
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