California-based NGL Labs has been banned from offering its anonymous messaging app to individuals under the age of 18 because of numerous alleged violations, including allegedly subjecting minors to a considerable risk of bullying.
It is the first time federal regulators have banned a digital platform from hosting minors. The company will pay $5 million to settle a lawsuit brought by the Federal Trade Commission (FTC) and the Los Angeles District Attorney’s Office, the agency announced on July 9.
In the complaint, the FTC and the district attorney’s office alleged that NGL and its co-founders, Raj Vir and Joao Figueiredo, actively marketed their service to children and teens, and falsely claimed that an artificial intelligence (AI) content moderation program filtered out cyberbullying and other harmful messages.
“Users complained that NGL failed to prevent rampant cyberbullying and threats against children and teens. One consumer reported that their friend had attempted suicide because of the NGL app,” the agency stated.
NGL is internet slang for “not gonna lie.” The NGL app allows users to pose questions and receive messages without knowing the sender. They can write their questions or use built-in ones provided by the app.
The app generates a personalized link with the question, which users can share on social media. Respondents click the link, leading them to NGL’s website to send an anonymous message.
When users receive an anonymous message, they are told they can subscribe to NGL Pro to uncover the sender’s identity.
The complaint alleged that users were sent fake messages that appeared to come from real people. Users were then allegedly tricked into signing up for the paid subscription that falsely promised to reveal the identity of the message senders.
The FTC claimed that NGL also was aware of children using their app but did not attempt to verify their age.
NGL was alleged to have breached the Children’s Online Privacy Protection Act Rule (COPPA), which requires apps and other online services to ensure that parents of users under 13 are informed about the personal information collected by the service. Apps are also required to obtain verifiable parental consent for these users.
The FTC claimed NGL did not obtain parental consent of users when required and failed to honor requests from parents who sought deletion of their children’s personal data.
The federal agency also accused NGL of violating the FTC Act prohibiting “unfair or deceptive acts or practices in or affecting commerce.”
The company was further accused of violating the Restore Online Shoppers’ Confidence Act, which includes a provision prohibiting sellers from interpreting an explicit rejection of a sales offer by a customer as an acceptance of the offer. For instance, billing customers who did not explicitly refuse a weekly charging amount. This is also called the “negative option feature.”
The State of California accused the company of violating California’s Unfair Competition Law, which prohibits businesses from engaging in any unfair or fraudulent practice and deceptive or misleading advertising. NGL was also alleged to have violated the California False Advertising Law, which bans businesses from making untrue or misleading statements in ads.
For these alleged violations, NGL and its two co-founders agreed “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,” the FTC said.
FTC Chair Lina M. Khan said the app ban followed the company’s “reckless disregard for kids’ safety.”
Los Angeles District Attorney George Gascón said that anonymous apps such as NGL “can facilitate rampant cyberbullying among teens,” and action was taken against the company to send a clear message that “targeting vulnerable populations will not be tolerated.”
In an emailed statement to The Epoch Times, the company responded that the safety and well-being of its community members are a “top priority at NGL.” The firm noted that since its service is anonymous, it has “no way of knowing the exact identity or username of message senders.”
“After nearly two years of cooperating with the FTC’s investigation, we view this resolution as an opportunity to make NGL better than ever for our users and we think the agreement is in our best interest,” Mr. Figueiredo said.
“While we believe many of the allegations around the youth of our user base are factually incorrect, we anticipate that the agreed upon age-gating and other procedures will now provide direction for others in our space, and hopefully improve policies generally.”
In its settlement, NGL agreed to several restrictions, in addition to prohibiting individuals under the age of 18 from accessing the app. All personal data of users below the age of 13 will be deleted. The company is banned from making misrepresentations of its AI capabilities and its ability to filter out cyberbullying.
Furthermore, the company is required to obtain express informed consent from consumers before billing them for a negative option subscription, simplify the subscription process, and send related reminders before billing.
NGL was released in 2021 and has millions of users worldwide. Google Store rates it as an app for people older than 12 years old, while recommending parental guidance.
