US government bans teen-focused messaging app NGL from hosting minors

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Popular anonymous messaging app NGL has promised to stop marketing to children and agreed to pay a $5 million fine after the Federal Trade Commission accused it of lying to users about its service and its capabilities, including artificial intelligence.

The FTC said in a statement Tuesday that it had reached a settlement with the app’s maker, NGL Labs, after an investigation found instances of alleged false claims, deceptive business practices and illegal tracking of children’s data. NGL is an Internet acronym for “don’t lie.”

In a complaint filed in the US District Court for the Central District of California, the FTC detailed how NGL violated several consumer-protection laws, including by falsely claiming that its “world-class AI content moderation” could prevent bullying and harassment. In fact, these issues were “widespread” on the app, the FTC said in its filing. The company also sold a $10-a-week “NGL Pro” subscription that promised to reveal the sender of a message from a friend or contact. Such messages were actually sent by the company.

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NGL said in a statement that “many” of the FTC’s allegations were “factually incorrect,” particularly disagreements over whether the company had actively marketed its apps to children under 13. Nevertheless, NGL said it would agree to a multimillion-dollar fine and a ban on offering its service to people under 18, which it described as “age-limiting.” The company announced other changes on its website.

NGL’s settlement is an unusual case in which the US government agrees to quantitative accountability from a tech company that profits from children using its service, while it knows its product has a negative impact on them. While US authorities have brought similar charges against Facebook, Instagram and WhatsApp owner Meta, and YouTube owner Alphabet, they have yet to make any concrete progress. Meanwhile, other social media apps, including NGL, have attracted consumers by promising alternative options.

The FTC’s move also marks the first time U.S. authorities have challenged the veracity of a company’s AI technology claims in court. Other legal claims have come mainly from copyright holders who say AI companies stole their work and customers who say promised features and capabilities don’t live up to their promises.

“We view this proposal as an opportunity to make NGL even better for our users, and we believe this agreement is in our best interest,” the company statement said.

Fraud, complaints and addiction

The FTC said it learned during a two-year investigation that NGL had received numerous complaints from parents of children and teens, including that use of the app had led to cases of self-harm and suicide attempts. Despite this information, NGL “made no changes to the design” of its app or marketing in response.

When customers complained, some NGL employees began laughing, with one writing “lol suckers” in a text message with NGL co-founders Raj Vir and João Figueiredo, according to the FTC’s filing.

On more than one occasion, the NGL app was reported as the most downloaded app in Apple’s App Store, the FTC said. During that time, the company’s co-founders wrote internal messages about how some customers had become “addicted” to the app while it was sending them fake messages.

The FTC said that “despite being aware of the negative consumer reviews, consumer complaints, and Apple’s response, NGL continued to make the same presentations to consumers.”

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