US government bans teen-focused messaging app NGL from hosting minors
NGL, a popular anonymous messaging app, has pledged to stop marketing to children and agreed to pay a $5 million fine after the Federal Trade Commission accused NGL of lying to users about its service and its capabilities, including artificial intelligence.
The FTC said in a statement on Tuesday that it has reached a settlement with app maker NGL Labs after an investigation uncovered instances of alleged false claims, deceptive business practices and illegal tracking of child data. NGL is an Internet acronym for “not gonna lie.”
In a complaint filed in the U.S. District Court for the Central District of California, the FTC detailed how NGL violated numerous consumer protection laws, including falsely claiming that its “world-class AI content moderation” could prevent bullying and harassment. In reality, these problems were “rampant” on the app, the FTC said in its filing. The company also marketed a $10-per-week “NGL Pro” subscription that promised to reveal the sender of a message it said was from a friend or contact. Such messages were actually sent by the company.
NGL said in a statement that “many” of the FTC’s allegations were “factually incorrect,” particularly disagreeing about whether the company actively marketed its app to children under 13. Still, NGL said it will agree to the multimillion-dollar fine and a ban on offering its service to people under 18, which it described as “age restriction.” The company other changes announced on its website.
NGL’s settlement marks an unusual case in which the U.S. government has agreed to quantifiable accountability for a technology company that profits from children using its service, despite knowing its product has a negative impact on them. While U.S. officials have made similar allegations against Facebook, Instagram and WhatsApp owner Meta and YouTube owner Alphabet, they haven’t made much substantive progress. Meanwhile, other social media apps, including NGL, have attracted consumers by offering promising alternatives.
The FTC’s actions also mark one of the first times that U.S. officials have challenged the veracity of a company’s AI technology claims in court. Other legal challenges have largely come from copyright holders who say AI companies have stolen their work and customers who say promised features and capabilities haven’t lived up to their promises.
“We see this resolution as an opportunity to make NGL better than ever for our users and we believe the agreement is in our best interest,” the company statement said.
Counterfeits, complaints and addiction
During a two-year investigation, the FTC said it learned that NGL had received numerous complaints from parents of children and teens, including reports that use of the app had led to instances of self-harm and suicide attempts. Despite that knowledge, NGL “made no changes to the design” of the app or marketing in response.
When customers complained, some NGL employees started laughing. According to the FTC filing, one of them wrote “Lol suckers” in a text message to NGL founders Raj Vir and Joao Figueiredo.
At more than one point, the NGL app was reported to be the most downloaded app in Apple’s App Store, the FTC said. At the time, the company’s co-founders wrote internal messages about how some customers had become “addicted” despite the app sending them fake messages.
“Despite NGL being aware of negative consumer reviews, complaints, and feedback about Apple,” the FTC said, “NGL continued to make the same claims to consumers.”
