NGL Labs and its two co-founders have entered into a $5 million settlement with the Federal Trade Commission for a "host of law violations related to their anonymous messaging app."
The FTC says the "NGL: ask me anything" app engaged in harmful practices, including by sending "fake messages" with questions such as "Are you straight?" and statements like "I know what you did.” The messages would apparently appear as if they were coming from social media friends of the user. The FTC said this practice began in 2022 in an effort to get customers to engage with the app.
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The app also "tricked users into signing up for a paid subscription" by claiming it would reveal the identity of messages that were being sent anonymously, the FTC says.
“We cannot tolerate such behavior, nor can we allow companies to profit at the expense of our children’s safety and well-being," said Los Angeles District Attorney George Gascón, who is part of the lawsuit with the FTC.
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In addition to paying a $5 million fine, the settlement says the app is banned from offering or marketing to anyone under the age of 18.
“NGL marketed its app to kids and teens despite knowing that it was exposing them to cyberbullying and harassment,” said FTC Chair Lina M. Khan.
NGL said it believes the settlement is in its "best interest."
"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," the company said.
The settlement will become official after it's approved by a District Court judge.