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Democratic Senators urge Federal Trade Commission to take on Facebook over ‘friendly fraud’

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Two Democratic U.S. senators called for the Federal Trade Commission to act on a complaint filed by consumer groups against Facebook Inc on Thursday that alleged the company scammed children into spending money on its platform.

A coalition of consumer groups asked the FTC to investigate whether Facebook had engaged in deceptive practices, claiming the company lured children into making extensive in-game purchases without parental consent.

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The social media company settled a class-action lawsuit on the issue in 2016, but further details came to light last month after a request by the Center for Investigative Reporting here resulted in the unsealing of the court documents.

The documents disclosed that Facebook employees referred to the practice as “friendly fraud” and called children who racked up thousands of dollars in charges “whales,” a term commonly used in casinos to describe high-spending gamblers.

“We urge the FTC to review in detail the complaint that was filed today on this issue. It shouldn’t take another settlement for Facebook to meet its ethical obligation to protect kids and families on its platform,” Senators Edward Markey and Richard Blumenthal said in a statement.

They said Facebook dodged their questions on the issue, posed to Chief Executive Mark Zuckerberg in a letter last month after the documents were unsealed.

“Facebook’s answers to our reasonable questions were inadequate and do not inspire trust,” they said.

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Facebook said in a statement that it had mechanisms in place to prevent fraud and provided dedicated resources for refund requests related to purchases by children.

“We want people to have safe and enjoyable gaming experiences on Facebook, so providing resources to seek refunds for unauthorized purchases made in games is an important part of the platform,” the statement added.

In its prior response to the lawmakers, Facebook said it never encouraged anyone to engage in friendly fraud and had incentives to resolve complaints directly with users to avoid credit card companies’ chargeback fees.

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The senators said the company failed, however, to explain why it did not act on widespread complaints before the case went to court and declined to answer specifically when Zuckerberg became aware of the issue.

Facebook is facing a slew of lawsuits and regulatory inquiries over its record on privacy, security and the use of its platform by groups spreading disinformation.

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The FTC is already investigating disclosures that Facebook inappropriately shared information belonging to 87 million users with the defunct British political consulting firm Cambridge Analytica.

Reporting by Katie Paul; Editing by Cynthia Osterman and Peter Cooney


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2020 Election

William Barr made it clear this week that he’d sign off on a sham investigation into the Dems’ 2020 nominee

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Welcome to another edition of What Fresh Hell?, Raw Story’s roundup of news items that might have become controversies under another regime, but got buried – or were at least under-appreciated – due to the daily firehose of political pratfalls, unhinged tweet storms and other sundry embarrassments coming out of the current White House.

A perfect storm propelled New York's sleaziest real estate developer to an Electoral College victory in 2016 despite winning three million fewer votes than his opponent, but Nate Silver made a compelling argument that the letter James Comey sent to Congress just 11 days before Election Day announcing that the FBI was re-opening its probe into Hillary Clinton's emails was decisive.

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Bill Barr is serving notice to DOJ officials that he’ll ruin them if they investigate Trump: MSNBC host

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An MSNBC discussion about Bill Barr running interference within the Justice Department for Donald Trump ended with "AM Joy" host Joy Reid suggesting that the attorney general's very public "media blitz" over the so-called "Horowitz Report" is a warning shot to anyone in the DOJ who thinks about investigating the president.

As Reid explained it, "He did a whole TV blitz to basically say that his own agency, the FBI, was spying on the Trump campaign, something that the inspector general said did not happen."

Reid took that to its logical conclusion.

"Now he’s saying, ‘Well, I’ve got a different report that’s going to find the motivations’ that he’s basically saying are bad motivations by people in the FBI.  And if you’re that FBI agent and then you hear that Donald Trump may be again looking for foreign help and maybe again getting help from Russia or forcing help from Ukraine, what do you do?" she asked. "Would you then not be concerned that, should you go ahead and investigate foreign interference in our election, that William Barr may come after you?"

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Stefanik voters turning on GOP lawmaker after she threw away her credibility to defend Trump

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Over the course of the impeachment hearings, Rep. Elise Stefanik (R-NY) has gone from a relative backbencher who sells herself as a moderate to voters in Upstate New York, to a theatrical partisan grandstanding for President Donald Trump and a top target of ire from Democrats.

But according to Politico, at least some of her voters appear turned off by her new stance.

"While Stefanik once able to strike a delicate balance between her Republican identity and her positions on issues like climate change, some think those earlier convictions are gone, like Phillip Paige, a former Stefanik backer and a member of SUNY Potsdam’s College Republicans," wrote Politico's Anna Gronewald. "A native of the 21st district’s Madrid, New York, Paige said he started to lose faith in Stefanik when she began supporting Trump as the party’s nominee in 2016. Paige supported John Kasich’s candidacy in that election. 'A lot of her boots-on-the-ground young Republican crowd has really become quite disillusioned,' he said. 'We saw her as what we thought the future of the Republican Party was and that really has been disproven. Unless, maybe the future of the Republican party is Donald Trump.'"

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