A group of children’s advocacy organizations has charged that Facebook intentionally fooled kids into incurring fees by playing games they found on its social network.
The organizations are asking that the Federal Trade Commission check to see if Facebook violated consumer protection and child privacy laws by doing so. Specifically, they want to know whether Facebook has engaged in unfair or deceptive practices in violation of Section 5 of the Federal Trade Commission Act and the Children’s Online Privacy Protection Act (COPPA).
“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 press release. “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.”
The FTC complaint is in response to unsealed documents from a 2012 class action lawsuit that Facebook settled in 2016. Upon a Freedom of Information Act request filed by the Center for Investigative Reporting, internal documents at Facebook revealed the company knowingly duped children into making in-game purchases and made refunds almost impossible to obtain. Facebook employees called the practice “friendly fraud” and referred to kids who spent large amounts of money as “whales,” a casino-industry term for super high rollers.
“Advocates are concerned that Facebook employed unfair practices by charging children for purchases made without parental consent and often without parental awareness,” according to Common Sense Media. “According to Section 5 of the Federal Trade Commission Act, “unfair” practices are defined as those that “cause or [are] likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition” (15 U.S.C. Sec. 45(n)). Advocates point to court documents to demonstrate substantial injury to consumers, including one teenager who incurred $6,500 of charges in just a few weeks, and request rates for refunds were 20 times higher than the usual rate of refund requests.”
“Facebook’s scamming of children is not only unethical and reprehensible — it’s likely a violation of consumer protection laws,” said Josh Golin, Executive Director of Campaign for Commercial-Free Childhood. “Time and time again, we see that Facebook plays by its own rules regardless of the cost to children, families and society. We urge the FTC to hold Facebook accountable.”