FTC can reopen Meta privacy case despite $5 billion fine, court rules

(Reuters) – Meta cannot stop the U.S. Federal Trade Commission from reopening a probe into its Facebook unit’s privacy practices for now, a U.S. appeals court ruled, despite Meta’s objections that it already paid a $5 billion fine and agreed to a range of safeguards.

The FTC wants to tighten an existing 2020 Facebook privacy settlement to ban profiting from minors’ data and expand curbs on facial recognition technology. The agency has accused Meta of misleading parents about protections for children.

The decision late on Tuesday from the U.S. Court of Appeals for the D.C. Circuit was a setback for Meta, which had asked the court to freeze the FTC case while it pursues a separate lawsuit challenging the FTC’s inquiry on constitutional grounds.

The appeals court said the FTC’s stated privacy concerns “implicate important public interests” and that Meta would have an opportunity to contest any final action by the agency.

Meta in a statement said the court’s order “does not address the substance of the FTC’s allegations, which are without merit.”

The FTC on Wednesday declined to comment.

Meta, which owns WhatsApp, Instagram and Facebook, has countered that the FTC cannot “unilaterally rewrite” the prior settlement terms, which a U.S. judge approved in 2020.

Meta said the FTC’s proposed changes would “curtail Meta’s development of new products, superintend Meta’s corporate governance, and impair Meta’s ability to serve its users and advertisers.”

The FTC countered that the settlement, which set new compliance and oversight requirements, was not intended to resolve “all claims in perpetuity.”

Meta and other social media companies are separately fighting hundreds of U.S. lawsuits accusing them of addicting children to their platforms.

The FTC is also suing Meta for allegedly monopolizing the personal social network market. Meta has denied the allegations.

(Reporting by Mike Scarcella; Editing by David Bario, Alexandra Hudson)