Meta Loses Second Bid to Thwart FTC’s Revisions to Privacy Pact

Meta Platforms Inc.’s lost its second court ruling this week seeking to stop the Federal Trade Commission’s reopening a 2020 privacy settlement over allegations that the company breached the terms.

In a ruling Thursday, US District Judge Randolph Moss in Washington denied Meta’s request for a preliminary injunction to pause the FTC proceedings while a lawsuit over their constitutionality is ongoing. Moss called Meta’s argument that it would face “irreparable harm” without preliminary relief “exceedingly weak.”

In his opinion, Moss wrote that if the FTC is correct on its claim that Meta is putting consumer privacy at risk, “that it would be in the public interest” for the proceeding to move forward.

On Tuesday, in a separate proceeding, a three-judge appeals panel in Washington also denied Meta’s request for a preliminary injunction to pause the FTC proceedings.

Last year, the FTC said that Meta has violated its earlier settlement, which required the company to pay a $5 billion penalty and make changes to its internal privacy checks. The agency initiated an internal proceeding to modify the settlement seeking to ban Meta from using facial recognition tools or monetizing children’s data. The company has filed a series of legal challenges with the FTC, including the case before Moss, which alleges the agency’s structure and proceedings are unconstitutional.

Meta’s lawsuit alleges that the FTC violates due process by acting as both prosecutor and judge in administrative proceedings, relying on a decision by the Supreme Court last year that companies can go straight to federal court to challenge the constitutionality of some proceedings.

The Justice Department, which is representing the FTC in the case, has asked Moss to dismiss Meta’s challenge. Moss wrote that he would hold off for now on tossing Meta’s lawsuit even though the FTC’s arguments “carry considerable — and, indeed, overwhelming — force.” He noted that he would like to wait until the Supreme Court decides a case later this year over the Securities and Exchange Commission’s use of in-house judges.

Top photo: The Meta logo on a laptop computer in the Brooklyn borough of New York, US, on Tuesday, July 26, 2022. Photographer: Gabby Jones/Bloomberg.