Facebook and The Order have agreed on a settlement subjecting FTC’s investigations, with a penalty and a new privacy program.
Facebook entered into a consent order with FTC in 2012, resolving allegations regarding data sharing with third-party applications and the control consumers had over that sharing.
According to a statement of Chairman Joe Simons, Commissioners Noah Joshua Phillips and Christine S. Wilson, “Facebook violated the FTC Act by engaging in a new set of deceptive practices relating to the collection and use of consumer phone numbers provided by consumers to enable security features such as two factor authentication.”
What does it mean for Facebook and it’s future?
Facebook is subject to a record-breaking $5 billion penalty. Five billion dollars is approximately 9% of Facebook’s 2018 revenue, and approximately 23% of its 2018 profit.
The new privacy obligations imposed on Facebook requires them to terminate developers’ access to users’ information if they fail to certify that they are in compliance with Facebook’s platform policies or fail to justify their need for specific user data.
Facebook must enforce it’s platform terms against app developers solely on the basis of the severity of the violation and not on the basis of the financial benefit that Facebook gains through them.
The existing privacy program must be expanded to cover WhatsApp and any other Facebook product or service.
The Order also requires Facebook to maintain a comprehensive data security program and data security obligations related to authentication, access controls, and encryption.
Compliance with Privacy Obligations
The Order will include a new corporate governance structure for a stringent compliance monitoring.
Facebook also needs to submit several obligatory information flows about privacy decisions. The platform also requires to form a new Board of Directors committee focused solely on privacy-related risks and Order compliance.
Also Read: Facebook announces updates in UI & Watch
Accountability of Mark Zuckerberg
Mark Zuckerberg’s ability to make privacy decisions has been terminated. Mark Zuckerberg will be held accountable for certifying quarterly—under threat of civil and criminal penalties and the company being in compliance with the Order’s Privacy Program.
Acknowledging the series of events, Mark Zuckerberg in a Facebook post mentioned, “We’ve formally reached a settlement with the Federal Trade Commission about privacy. We’ve agreed to pay a historic fine”.
He added, “We have a responsibility to protect people’s privacy. We already work hard to live up to this responsibility, but now we’re going to set a completely new standard for our industry.”
But looking at the long list of privacy scandals of Facebook: 2FA, shadow contact information, millions of accounts being breached, Facebook making shady deals with companies like Apple & more, Facebook storing millions of Instagram passwords, and the window of time all of these scandals have happened in, looks like “Facebook has not been working hard to live up to the responsibility”.
According to the statement of Chairman Joe Simons, Commissioners Noah Joshua Phillips and Christine S. Wilson, their colleagues are lament about few terms of the settlement like limitations on data collection and use. They also object t to the settlement based on their belief that the release in this matter is too broad, leaving the Commission unable to sue based on any future revelations about Facebook’s past conduct.
Sarah Frier, Tech Reporter, Bloomberg tweeted that the settlement only adds oversight to Facebook’s operations.
Jane Manchun Wong thinks that $5 billion fine doesn’t cost Facebook much.
If we believe Zuckerberg’s post sharing their quarterly results- there are more than 2.7 billion people using Facebook’s family of apps, then yes it is true that this fine would cost a bag of peanuts for Facebook.
The settlement doesn’t mean that we won’t see another privacy scandal by Facebook. It means that it would be more difficult than before for Facebook to involve in a scandal.