The Federal Trade Commission has banned anonymous messaging app NGL from hosting users under 18, the first time the agency has ordered a digital platform to stop serving minors.
The decision came after the FTC and the Los Angeles County District Attorney’s office alleged in a lawsuit that the app unfairly marketed to children and falsely claimed that its AI-powered content moderation system prevented cyberbullying. It also accused the app of engaging in deceptive business practices when marketing its premium subscription plan, NGL Pro.
NGL Labs, which owns NGL, and the app’s co-founders Raj Vir and Joao Figueiredo settled the lawsuit Tuesday, according to a press release from the FTC and the DA’s office. In addition to enforcing an age restriction, the company and its founders will pay $5 million as part of the settlement.
“After nearly two years of cooperating with the FTC’s investigation, we see this resolution as an opportunity to make NGL better than ever for our users, and we feel the settlement is in our best interest,” Figueiredo said in a statement. email statement to NBC News. “While we believe that many of the claims about the youth of our user base are factually incorrect, we anticipate that the agreed-upon age determination and other procedures will now provide guidance to others in our space and hopefully improve policies in general.”
The California-based messaging app, whose name sounds like the term “won’t lie,” launched in 2021. It billed itself as “a new take on anonymity,” allowing users to post questions to their social media platforms that would encourage followers to respond anonymously.
It quickly became popular among teenagers and claimed to be a “safe space” for them. However, NBC News previously reported that profanity and offensive language were able to bypass the app’s language filters.
“NGL marketed its app to children and teens despite knowing it was exposing them to cyberbullying and harassment,” FTC Chairwoman Lina M. Khan said in a press release.
The complaint by the FTC and the Los Angeles DA also alleged that NGL violated the Children’s Online Privacy Protection Act (COPPA), which requires companies that serve children under 13 to disclose what personal information is being collected and obtain their consent. parent verified.
Los Angeles DA George Gascón said the charges against NGL “send a clear message that deceptive practices and the targeting of vulnerable populations will not be tolerated.”
“We cannot tolerate such behavior, nor can we allow companies to profit at the expense of the safety and well-being of our children,” Gascón said in a press release.
According to the complaint, NGL allegedly misled users by sending fake messages and questions to induce engagement. The FTC and Los Angeles DA found that many consumers found the fake messages “annoying.”
The complaint further alleged that NGL induced users to subscribe to NGL Pro in order to reveal the identities of anonymous senders of messages, even if the messages were fake. NGL Pro also did not disclose the exact identities of the senders; instead it sent “hints” about them including their phone model and approximate location, according to the suit.
The FTC and Los Angeles DA called this a “bait and switch tactic.” They also said many consumers were unaware that NGL Pro, which cost up to $9.99 per week, was a recurring weekly fee that violates the Restoring Online Consumer Confidence Act (ROSCA). ROSCA requires companies to disclose the terms of a transaction and obtain users’ informed consent for fees.
According to a press release, the $4.5 million settlement will be used to provide restitution to consumers. Meanwhile, $500,000 will be paid as a civil penalty to the Los Angeles DA’s office.