US slaps $5-b fine on Facebook, toughens privacy oversight
WASHINGTON, United States (AFP) — US regulators on Wednesday slapped a record $5 billion fine on Facebook for privacy violations in a wide-ranging settlement that calls for revamping privacy controls and oversight at the social network.
The Federal Trade Commission said the penalty was the largest ever imposed on any company for violating consumers’ privacy and one of the largest penalties ever assessed by the US government for any violation.
However, two Democratic members of the five-member FTC dissented, arguing the agreement failed to go far enough to rein in Facebook business practices that endanger consumers.
The agreement requires Facebook to create a privacy committee within its board of directors to be appointed by an independent nominating committee.
This would end “unfettered control” of decisions on privacy by Facebook’s chief executive Mark Zuckerberg, the FTC statement said.
FTC Chairman Joe Simons said the penalty was appropriate to address concerns over Facebook’s misuse of personal information.
“The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC,” Simons said in a statement.
“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.”
Under the agreement, Facebook’s CEO and staff must submit to the FTC quarterly certifications that the company is in compliance with the privacy programme as well as an annual certification.
Facebook also will be required to conduct a privacy review of every new or modified product, service, or practice before it is implemented, including for its WhatsApp and Instagram services.
FTC commissioner Rohit Chopra rejected the settlement, saying it “does little to change the business model or practices that led to the recidivism.”
In a separate statement, dissenting FTC commissioner Rebecca Slaughter said the deal appears to absolve Facebook and key executives from liability. She said the government should instead take Facebook to court.
Marc Rotenberg of the Electronic Privacy Information Centre called the FTC action “too little, too late.”
“American consumers cannot wait another decade for the commission to act against a company that violates their privacy rights,” Rotenberg said. “Congress should move quickly to establish a data protection agency.”
Charlotte Slaiman of the consumer group Public Knowledge also expressed concern that the settlement would do little to change Facebook’s business practices.
“Under this settlement, Facebook does not have to meaningfully change how it collects and uses your data,” Slaiman said.
Facebook’s top 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.”
The FTC last year reopened its investigation of Facebook, which reached a 2011 settlement on handling private data, after a series of revelations on the mishandling of personal data.
The move came after Facebook acknowledged data on tens of millions of users had been hijacked by Cambridge Analytica, a consultancy working on the 2016 Donald Trump campaign.