The NGL anonymous messaging app has been banned by the United States Federal Trade Commission (FTC) for targeting minors.
NGL, the anonymous messaging app, has agreed to cease marketing to children and pay a $5 million fine.
This action follows the FTC's accusations of the company misleading users about its services and capabilities, including its use of artificial intelligence (NGL message bot).
In a statement released on Tuesday, the FTC outlined the results of its investigation into NGL Labs, the company behind the app.
The FTC found that NGL made false claims about its "world-class AI content moderation" that was supposed to prevent bullying and harassment.
The problems were not limited to the platform but prevalent.
Furthermore, the company promoted a weekly "NGL Pro" subscription for $10, assuring users they could discover the message sender.
Nevertheless, these messages frequently originated from the company rather than from actual friends or contacts.
The FTC's complaint, filed with the US District Court for the Central District of California, details how NGL violated consumer protection laws.
The agency accused NGL of deceptive business practices and illegal tracking of children's data.
NGL short for "not gonna lie." 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 the age of 13.
However, they agreed to a multimillion-dollar fine and a ban on offering its services to anyone under the age of 18, which it described as "age-gating."
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NGL's situation is exceptional because it is one of the few times a technology company has experienced substantial repercussions for its influence on young users.
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Although similar accusations have been made against larger companies like Facebook, Instagram, and YouTube, progress has been limited.
This case is one of the first times US officials have challenged such claims in court.
While previous legal challenges have focused on copyright issues or unmet promises of AI capabilities, the NGL case shows the potential harm these technologies can cause when not adequately managed.
Parental Concerns and Company Response
Over a two-year investigation, the FTC received numerous complaints from parents about the negative effects of the NGL app on their children and teens.
Reports included instances of self-harm and attempted suicide linked to the app's use.
Despite being aware of these issues, NGL made no significant changes to its app or marketing strategies. Internal communications revealed that NGL employees dismissed customer complaints, with one even writing "Lol suckers" in a text message to the company's co-founders, Raj Vir and Joao Figueiredo.
At a certain time, the NGL app was the top app downloaded in Apple's App Store.
During this time, internal messages showed that company leaders were aware of how some users had become "addicted" to the app, even as it sent them fake messages.
Despite receiving negative consumer reviews, complaints, and feedback from Apple, NGL continued to make false representations to its users.
In response to the FTC's findings, NGL released a statement expressing its commitment to improving the app.
"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.