The Federal Trade Commission is banning an app for servicing users under the age of 18 for the first time. The agency Tuesday announced it will ban NGL, an anonymous social app, from marketing or offering its app to minors. NGL will also pay $5 million in settlement over the lawsuit.

Launched in 2021, NGL reached number one in the app store based on its concept of allowing users to post links to their social accounts where friends can click through to anonymously submit questions.

According to the FTC and the Los Angeles DA's office, the app and even the co-founders specifically marketed NGL to minors and falsely claimed that its AI content moderation system eradicates all harmful messages and cyberbullying.

Further, the complaint states that NGL had also distributed deceptive questions allegedly from real people to the users as an attempt to create some form of fear among these users to pay their $9.99 monthly subscription just for hints on who is sending them the messages.

TechCrunch found out the truth way back in 2022, when we published a link to an NGL asking questions in an Instagram Story that only went live for one minute before we took it down. Hours later, after posting the link, we received questions from half a dozen "people" on NGL. And the truth is nobody ever actually saw our link since it only went live for a second.

The FTC says it was in 2022 when NGL turned to automatically sending users fake computer-generated questions once it was already unable to generate interest in its app. According to the complaint, users began receiving texts like "are you straight?" or "I know what you did." When a user saw the question, NGL would prompt them to obtain the app's monthly subscription to get hints toward the identity-without the truth: it came from a bot.

These actions by NGL prompted many people to complain, said the FTC, which NGL executives laughed off as 'suckers,' another term for those who appreciate free things.

The complaint also claims that NGL failed to clearly disclose consent for recurring charges for its paid service and that the company ran afoul of the Children's Online Privacy Protection Act (COPPA) Rule, which requires apps that are directed toward children under 13 to alert their parents about the kinds of personal information they collect.

"NGL marketed its app to kids and teens despite knowing that it exposed them to cyberbullying and harassment, said FTC Chair Lina Khan in a press release. Given NGL's reckless disregard for kids' safety, the FTC's order would ban NGL from marketing or offering its app to those under 18. We will keep cracking down on businesses that unlawfully exploit kids for profit.

According to the settlement, NGL will apply an age gate that will prevent new and current users under 18 years from accessing the application. NGL is restricted from passing text messages' source as being anybody other than itself. The company is restricted from providing misleading advertisements of recurring charges. In addition, the company is restricted from lying about its AI content moderation system capacity toward cyberbullying capabilities.

Having spent nearly two years cooperating with an FTC investigation, we welcome this settlement as an opportunity to make NGL even better for our users and believe the agreement is in our best interest, said NGL co-founder Joao Figueiredo in a statement to TechCrunch. "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," he added.

A key milestone achieved by the FTC, under Chair Lina Khan, is that it has taken settlement steps to stop social media services from making money on practices that may harm children.