In a motion intended to prevent messaging apps from marketing to and hosting underage kids, the Federal Trade Commission and the Los Angeles District Attorney’s office have blocked NGL Labs and its founders from serving users under 18-years-old, among other regulations.
A lawsuit and settlement announced on Tuesday penalizes the company’s platform “NGL: ask me anything,” arguing it “marketed its app to kids and teens despite knowing that it was exposing them to cyberbullying and harassment.”
This legal action taken against NGL Labs and its founders, Raj Vir and Joao Figueiredo, is representative of the FTC’s mission of restricting anonymous messaging apps from purposefully marketing to and misleading minors, along with regulating deceptive claims about AI content moderation.
“We will keep cracking down on businesses that unlawfully exploit kids for profit,” FTC Chair Lina M. Khan said in a statement.
The California-based app was launched in 2021 as an anonymous messaging service that allows people to receive anonymous messages from their friends and social media followers. NGL and its operators marketed the app as a “safe space for teens,” saying it uses “world class AI content moderation” including “deep learning and pattern matching algorithms” to combat cyberbullying and other harms.
However, the FTC’s and Los Angeles DA’s office’s complaint alleges NGL “aggressively” marketed the service to underage users despite being aware of the harms from similar services, deceived users with fake AI-generated messages and other tactics aimed at driving up the number of paid users; failed to clearly disclose and obtain consent for recurring charges for its NGL Pro service, violating the Restore Online Shoppers’ Confidence Act; and violated the Children’s Online Privacy Protection Act Rule (COPPA Rule).
“The consequences of these actions can be severe. The anonymity provided by the app can facilitate rampant cyberbullying among teens, causing untold harm to our young people,” Los Angeles District Attorney George Gascón said. “We cannot tolerate such behavior, nor can we allow companies to profit at the expense of our children’s safety and well-being. Today’s charges send a clear message that deceptive practices and targeting vulnerable populations will not be tolerated.”
The proposed order details all of the mandates, and also requires NGL, Vir, and Figueiredo to pay $4.5 million, which will be used to provide redress to consumers, and a $500,000 civil penalty to the Los Angeles DA’s office.
