U.S. fines Facebook $5 billion
Also imposes new privacy rules, limits Zuckerberg’s control
OTTAWA — Canadian Facebook users could benefit from new privacy rules imposed by U.S. authorities Wednesday as part of a historic US$5-billion settlement with the social media giant.
The U.S. Federal Trade Commission announced Wednesday that Facebook had agreed to pay $5 billion in fines and overhaul how it handle privacy issues in the wake of the Cambridge Analytica scandal.
While the magnitude of the fine is historic, FTC officials told reporters Wednesday that new privacy rules imposed on Facebook could have a far greater impact on the company’s operations.
“The enormity of this penalty resets the baseline for privacy cases, and serves as an important deterrent for future violations,” FTC chair Joe Simons told a news conference in Washington.
The order requires Facebook to establish an independent committee of its board of directors to oversee all serious privacy issues and breaches — removing, the agency said, CEO Mark Zuckerberg’s “unfettered” control over privacy matters.
Facebook has also been ordered to take more steps to tighten its control over user data, including exercising “greater oversight” of third-party apps on its platform, giving users clear notice when it is using facial recognition technology to identify them, and establishing a “comprehensive” data security program.
The FTC ordered Facebook to log any privacy breach involving 500 or more users, and to tell the FTC how the company intends to address those breaches within 30 days.
Zuckerberg will also be required to personally certify that Facebook is complying with the new rules, meaning violations of the FTC orders could result in civil or criminal penalties. The company’s progress will also be reviewed by a third-party “assessor,” who can only be removed by the independent privacy committee or by the FTC itself.
The deal came as lawmakers in the U.S., Europe and Canada are openly musing about the need for tighter regulation of transnational tech and social media giants like Facebook, Google and Amazon.
The new privacy rules could apply to Facebook’s roughly 23 million users in Canada, where the company has been accused of skirting privacy rules and refusing to comply with federal law.
In April, Privacy Commissioner Daniel Therrien said that the social media giant broke Canadian privacy law in the Cambridge Analytica scandal, when 87 million Facebook users had their personal information harvested by researcher Aleksandr Kogan.
Despite 622,000 Canadians having had their personal information collected — the vast majority without their knowledge or consent — Facebook said in April it was “disappointed” in Therrien’s report into the Cambridge Analytica scandal, and that there was no evidence that the data was shared with Cambridge Analytica.
Therrien’s office said it still intends to bring its complaint to Federal Court, and that it is reviewing the FTC’s decision “with interest.”
Facebook has tightened its rules around what information third-party app developers can access, but it still faces increasing pressure from politicians both in the United States and Europe to take user privacy and data ownership issues more seriously.
While FTC and U.S. Department of Justice officials heralded the deal Wednesday, the agency’s order was not unanimous. FTC commissioner Rohit Chorpa opposed the settlement, suggesting that even a $5-billion fine would do little to change the business practices of a company that made $55.8 billion in revenue last year.