FTC Fines Facebook $5 billion, Imposes New Privacy Oversight
It’s a lot of cash, but critics call the deal a win for Facebook and its CEO.
US regulators on Wednesday slapped a record $5 billion fine on Facebook for privacy violations in a settlement requiring the world’s biggest social network to “submit to new restrictions and a modified corporate structure.”
The Federal Trade Commission said the penalty was the largest ever imposed on any company for violating consumers’ privacy. Moreover, it is one of the largest penalties ever assessed by the US government for any violation.
“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” FTC Chairperson Joe Simons said.
“The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC. The relief is designed not only to punish future violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.”
A Win for Facebook?
The fine is high, and the settlement demands more privacy oversight at the company. But what the deal does not do is find anyone, including CEO Mark Zuckerberg, personally responsible. It does not mandate huge changes to the way Facebook collects data. It only directs the social network to the way it makes disclosures and honors user settings.
The commission voted 3-2 along party lines to support the settlement. The two commissioners who voted against adopting the settlement were Democrats Rebecca Kelly Slaughter and Rohit Chopra. They said it went nowhere near far enough, leaving Facebook ample room to get up to mischief in the future.
What it’s all about
The biggest set of charges in the settlement relate to Facebook allowing third-party app developers to access data about users’ friends, without saying they were doing so—the heart of the Cambridge Analytica scandal.
“At least tens of millions of American users relied on Facebook’s deceptive privacy settings and statements to restrict the sharing of their information,” the complaint says, “When, in fact, third-party developers could access and collect their data through their friends’ use of third-party developers’ apps.”
The settlement reflected several charges about how Facebook handled third-party app permissions for years, all brought to light by investigations that began in the wake of the Cambridge Analytica revelations.
Facebook lawyer Colin Stretch said the agreement “will require a fundamental shift in the way we approach our work and it will place additional responsibility on people building our products at every level of the company.”