WASHINGTON, D.C. — California-based tech company, NGL Labs, LLC, and its co-founders, Raj Vir and Joao Figueiredo, have landed in hot water with the Federal Trade Commission and the Los Angeles District Attorney’s Office for a host of legal infractions concerning their anonymous messaging application. The charges predominantly involve unscrupulous marketing strategies aimed at youngsters and adolescents along with fictitious claims about built-in safety features.
In their complaint, the FTC and Los Angeles DA’s Office allege that NGL had promoted their app as a protected zone for the youth, asserting it possessed high-end AI mechanisms set up to counter cyberbullying. However, it seems this veil of security was nothing more than a façade.
FTC Chair Lina M. Khan criticized NGL for deliberately targeting this young demographic whilst acknowledging the potential dangers such an app could present. According to Khan, NGL exposed this vulnerable group to cyberbullying and harassment, displaying a careless regard for safety. She pledged a renewed dedication to penalizing businesses that exploit children for gains.
Los Angeles District Attorney George Gascón echoed similar sentiments, emphasizing the severe repercussions that an app like NGL could inflict. He reinforced the stand against companies profiting at the cost of the safety and well-being of minors.
Launched in 2021, NGL allowed users to send anonymous messages, creating a potential breeding ground for cyberbullying. To make matters worse, the company is accused of artificially generating false messages that seemed real to manipulate users into subscribing to their paid service, with promises of revealing the identity of the message sender.
Moreover, the FTC and Los Angeles DA have alleged that NGL failed to effectively convey recurring charges for its service, deceived users with artificial messages, and broke the Children’s Online Privacy Protection Act Rule (COPPA Rule). This violation is pivotal, as the COPPA Rule mandates online services used by children under 13 to inform parents and seek their consent on the personal information collected from the children.
To settle the lawsuit, the proposed order requires the defendants will pay a total of $5 million. Additionally, they will be forbidden from promoting their app, known as “NGL: ask me anything”, to anyone below the age of 18. The stipulated final order, once approved by a federal court, will impose various restrictions on NGL and its founders, including implementing neutral age gates, deleting all personal information related to users under 18, and obtaining explicit consent from consumers before billing them.
This verdict sends out a significant signal to the tech industry about the importance of protecting young audiences online and to adhere to responsible marketing and operation practices.
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