Texas investigates TikTok, Instagram, and others over use of minors’ data

The news: Texas has launched an investigation into 15 different companies and social media platforms including Instagram, TikTok, and Reddit, over their handling of underage user data and privacy.

Ken Paxton, the state’s attorney general, said last week the investigation is looking into whether or not the platforms violated two state laws—the Securing Children Online through Parental Empowerment Act and the Texas Data Privacy and Security Act—that restrict the use of minors’ data and require platforms to provide specific protections against harmful content.

Legal problems piling: Texas’ investigation adds to a lengthy and growing list of litigation and probes that regulators in the US and abroad are launching into large digital platforms’ privacy practices and impact on minors.

• The growing number of state-level US bills putting restrictions on data collection and app design for minors underscores the lack of federal data privacy legislation, creating a complicated legal landscape for platforms and advertisers alike.
• There’s some hope on the horizon for a regulatory change that could overwrite scattered state bills. President-elect Donald Trump’s recently announced pick for the head of the Federal Trade Commission has a record of calling for increased regulation of data collection and retention practices that could lead to clearer national guidelines on best practices.
• But abroad, it’s a different story. The European Commission has opened investigations into Meta, TikTok, and others over their impact on teens and handling of user privacy, setting the stage for potentially billions in fines that could fundamentally alter the way major platforms and advertisers do business.

The changing tide: While the US appears to be inching toward a federal privacy standard, the digital advertising and social media industry’s mounting legal challenges make it clear that the next chapter of digital regulations will force companies to significantly adjust their practices.

• As access to young consumers’ information becomes increasingly hard for brands and marketers to collect and access, spending could shift away from platforms like Instagram or TikTok toward channels with less stringent privacy measures, like connected TVs or influencer marketing. That’s a sign that marketers should diversify their ad budgets now rather than waiting for the shoe to drop.

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