On July 9, the Federal Trade Commission (FTC) ordered “Not Gonna Lie” (NGL), an anonymous messaging app, to ban users under 18 in a landmark ruling that marks the first time the U.S. has required a digital platform to stop serving minors. As NBC News reports, the California-based company has settled a lawsuit with the FTC and the Los Angeles County District Attorney’s Office for $5 million.

NGL Labs, which owns the app, and co-founders Raj Vir and Joao Figueiredo face allegations of unfairly marketing to children and falsely claiming their AI-powered content moderation system prevented cyberbullying. The lawsuit also accuses the company of deceptive practices in marketing its premium subscription plan, NGL Pro.

Launched in 2021, NGL allowed users to post questions on social media platforms, prompting followers to respond anonymously. The app quickly gained popularity among teens, touting itself as a “safe space” for young users. However, NBC News has reported instances where slurs and harassing language bypassed the app’s language filters.

FTC Chair Lina M. Khan stated, “NGL marketed its app to kids and teens despite knowing that it was exposing them to cyberbullying and harassment.”

The complaint alleges that NGL violated the Children’s Online Privacy Protection Act by failing to disclose personal information collection practices and obtain verified parental consent for users under 13. Additionally, the FTC claims NGL deceived users by sending fake messages to drive engagement and prompting subscriptions to NGL Pro to reveal sender identities, even for fabricated messages.

NGL Pro, costing up to $9.99 per week, allegedly used “bait-and-switch” tactics by providing only hints about senders’ identities rather than exact information. The FTC also says many consumers were unaware of the recurring weekly charge, violating the Restore Online Shoppers’ Confidence Act.

Of the $5 million settlement, $4.5 million will go towards consumer redress, with the remaining $500,000 paid as a civil penalty to the Los Angeles County District Attorney’s office.

Figueiredo responded to the settlement, stating, “We view this resolution as an opportunity to make NGL better than ever for our users, and we think the agreement is in our best interest.” He added that while they dispute some allegations, they anticipate the agreed-upon age-gating and other procedures will provide direction for others in the industry.