FTC fines Facebook $5B and obliges it to adopt a new privacy framework

Pierluigi Paganini July 25, 2019

The Federal Trade Commission fined Facebook $5 billion for privacy violations and is instituting new oversight and restrictions on its business.

The Federal Trade Commission fined Facebook $5 billion for privacy violations over the Cambridge Analytica scandal. The authorities are also instituting new oversight and restrictions on its business.

In April 2018, Facebook revealed that 87 million users have been affected by the Cambridge Analytica case, much more than 50 million users initially thought.

This is the greatest fine assigned by the Federal Trade Commission.

Facebook also accepted a 20-year-long agreement that obliges it to implement a new organizational framework designed to enhance the protection of privacy and policies.

“The order requires Facebook to restructure its approach to privacy from the corporate down, and establishes strong new mechanisms to ensure that Facebook executives are accountable for the decisions they make about privacy and that those decisions are subject to meaningful oversight,” reads the FTC’s press release.

The settlement also obliges Zuckerberg to personally certify the compliance of the company with its privacy programs.

“The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC,” said Joe Simons, the chairman of the FTC. Simons explained that the settlement aims “to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.”

The FTC has investigated all the violations of the settlement that Facebook reached in 2012 after regulators claimed severe violations of users privacy made by the company.

According to the FTC, Facebook used deceptive disclosures about privacy settings to force users to share their personal information with third-party apps used by people in their networks.

The new FTC’s settlement with Facebook establishes an “independent privacy committee” of Facebook directors. The committee is not controlled by Facebook, instead, it will be appointed by an independent nominating committee.

Of course, the new privacy framework will also cover company-owned WhatsApp and Instagram.

“We’ve agreed to pay a historic fine, but even more important, we’re going to make some major structural changes to how we build products and run this company,” Facebook CEO Mark Zuckerberg said in a statement.

As part of this settlement, we’re bringing our privacy controls more in line with our financial controls under the Sarbanes-Oxley legislation. Our executives, including me, will have to certify that all of the work we oversee meets our privacy commitments.”

The reason I support them is that I believe they will reduce the number of mistakes we make and help us deliver stronger privacy protections for everyone.”

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Pierluigi Paganini

(SecurityAffairs – social network, settlement)

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