The FTC announced yesterday that NGL Labs (the company behind anonymous messaging app, “NGL: ask me anything”) and two of its co-founders will pay $5 million to settle an action brought by the FTC and the Los Angeles District Attorney's Office over what the FTC called “a host of law violations…including unfairly marketing the service to children and teens.” In addition, they will be banned from offering the app to anyone under the age of 18.

The app, which launched in 2021, “allows people to receive anonymous messages from their friends and social media followers” and was marketed as “a safe space for teens." However, according to the complaint, defendants misrepresented certain elements of the app, targeted children and teens despite a likelihood of harm to those groups, failed to comply with negative option requirements, and failed to sufficiently protect children's' privacy. 

Specifically, the complaint alleges that the defendants violated Section 5 of the FTC Act, ROSCA, COPPA, and California's Business and Professions Code, alleging that the defendants:

• Misrepresented that anonymous messages consumers receive through the app are from their friends or social media contacts, when in fact the messages were fake, computer-generated messages from the defendants;
• Misrepresented that people who purchase the “Pro” version of the app would be provided the identity of those who send them messages, when that was not the case;
• Misrepresented that they use AI content moderation to filter out harmful language/bullying, when in fact the moderation failed to do so;
• Targeted children and teens “knowing that use of anonymous messaging apps by these groups causes substantial injury” (noting that the likelihood of that injury “is not outweighed by countervailing benefits to consumers or competition");
• Failed to clearly and conspicuously disclose the material terms of transactions before obtaining billing information, and failed to obtain consumers' express informed consent before charging a consumers card or other financial account;
• Failed to provide notice to parents of the information they collected from children, how they used such information, and their disclosure practices;
• Failed to obtain consent from parents before collecting/using personal information from children;
• Failed to delete personal information from children at the request of parents; and 
• Inappropriately retained personal information collection from children for longer than necessary.

The proposed order prohibits the defendants from engaging in the practices described above, requires that they implement an age-gate preventing users (new or current) from accessing the app if they are under 18, and requires that they delete personal information associated with certain users.