Meta sued the Federal Trade Commission yesterday in a lawsuit that challenges the FTC’s authority to impose new privacy obligations on the social media firm.
The complaint stems from the FTC’s May 2023 allegation that Meta-owned Facebook violated a 2020 privacy settlement and the Children’s Online Privacy Protection Act. The FTC proposed changes to the 2020 privacy order that would, among other things, prohibit Facebook from monetizing data it collects from users under 18.
Meta’s lawsuit against the FTC challenges what it calls “the structurally unconstitutional authority exercised by the FTC through its Commissioners in an administrative reopening proceeding against Meta.” It was filed against the FTC, Chair Lina Khan, and other commissioners in US District Court for the District of Columbia. Meta is seeking a preliminary injunction to stop the FTC proceeding pending resolution of the lawsuit.
Meta argues that in the FTC’s administrative proceedings, “the Commission has a dual role as prosecutor and judge in violation of the Due Process Clause.” Meta asked the court to “declare that certain fundamental aspects of the Commission’s structure violate the US Constitution, and that these violations render unlawful the FTC Proceeding against Meta.”
Meta says it should have a right to a trial by jury and that “Congress unconstitutionally has delegated to the FTC the power to assign disputes to administrative adjudication rather than litigating them before an Article III court.” The FTC should not be allowed to “unilaterally modify the terms” of the 2020 settlement, Meta said.
The FTC action “would dictate how and when Meta can design its products,” the lawsuit said.
Democrats slam “baseless,” “embarrassing” suit
Meta’s lawsuit was criticized by US Rep. Frank Pallone, Jr. (D-N.J.), the ranking Democrat on the House Commerce Committee. “This lawsuit is embarrassing,” Pallone said in a statement. “It speaks volumes that Meta would rather launch a frivolous lawsuit against the agency tasked by Congress with protecting American consumers, especially our children, than do the serious work needed to reform their platforms.”
Pallone predicted that Meta will lose the lawsuit and called it “a stunt intended to distract from the serious concerns regarding Meta’s social media platforms and business practices.”
US Sen. Ed Markey (D-Mass.) issued a similar criticism. “Meta’s baseless lawsuit is a weak attempt to avoid accountability for its repeated failures to protect kids’ privacy online,” Markey said.
The FTC declined to comment on Meta’s lawsuit when contacted by Ars today.
Meta pins hopes on SCOTUS decision
Meta filed its lawsuit two days after a US District Court ruling that went against the company. Judge Timothy Kelly denied Meta’s motion to block the FTC proceedings, writing that “the Court lacks jurisdiction over claims related to potential changes to the 2020 administrative order and the FTC’s authority to reopen its proceedings and modify that order.”
Meta’s lawsuit cites an April 2023 Supreme Court ruling in Axon Enterprise v. Federal Trade Commission. That ruling “confirmed a new avenue for pre-enforcement challenges to the administrative proceedings of federal agencies,” allowing defendants “to short-circuit the administrative process and go directly to a district court to challenge the proceedings up front,” Columbia Law Professor Ronald Mann explained on SCOTUSblog.
Meta’s lawsuit against the FTC quotes Judge Kelly as saying the case could be subject to a review under the Supreme Court’s Axon precedent:
On November 27, 2023, this Court—per Judge Kelly—denied Meta’s motion. Judge Kelly held that the Court lacks jurisdiction to entertain Meta’s claims in the United States v. Facebook, Inc. action because the 2020 Order was not part of the Court’s Stipulated Order entered in that action. His decision did not address Meta’s constitutional challenges to the structure of the Commission and the FTC Proceeding, but he had explained at oral argument that if he determines that he lacks jurisdiction over the 2020 Order “what has to happen is Meta has to go and file another lawsuit and, maybe, it will be assigned to me, but, maybe, it will be assigned to one of my colleagues, and… whoever it’s assigned to would go through the issue of whether there’s Axon jurisdiction at this point.”
Meta, in addition to filing a lawsuit against the FTC in US District Court, appealed Judge Kelly’s ruling to the US Court of Appeals for the District of Columbia Circuit.
US: Supreme Court ruling doesn’t help Meta
The US government argued in an August 2023 court filing that the Axon ruling doesn’t give Meta the right to avoid the administrative proceeding. “In Axon, the Supreme Court concluded that district courts retain federal question jurisdiction under the FTC Act to hear a limited subset of claims challenging ‘the structure or very existence of an agency,'” the US said. “The Court was emphatic that it was not expressing ‘newfound enthusiasm’ for immediate judicial review.”
The US said Meta is “hoping to expand Axon beyond its limits,” and that applying the standard in Axon “mandates a conclusion that Meta’s procedural and scope challenges should be raised in a court of appeals after a final Commission decision, and this Court lacks jurisdiction to decide them.”
The FTC alleged that Facebook violated its obligations “by continuing to give app developers access to users’ private information after promising in 2018 to cut off such access if users had not used those apps in the previous 90 days. In certain circumstances, Facebook continued to allow third-party app developers to access that user data until mid-2020.”
Facebook also “misled parents about their ability to control with whom their children communicated through its Messenger Kids app” from late 2017 until mid-2019, the FTC said. “Despite the company’s promises that children using Messenger Kids would only be able to communicate with contacts approved by their parents, children in certain circumstances were able to communicate with unapproved contacts in group text chats and group video calls,” the FTC said.