Facebook fined $5 billion; limits put on Zuckerberg
Critics are suggesting actions are just a slap on the wrist
SAN JOSE, Calif. — The Federal Trade Commission has fined Facebook $5 billion in a settlement the agency promises will result in real change in how the social networking giant handles its users’ information.
The FTC on Wednesday confirmed numerous reports that it approved an “unprecedented” settlement — it includes the largest privacy fine ever — on July 24 after a yearlong investigation into whether the company had violated terms of a previous privacy settlement.
Among key parts of the new, 20-year deal: The Silicon Valley company must create a board-level privacy committee, appoint privacy compliance officers who cannot be removed by Facebook’s chief executive, and provide quarterly and yearly certifications of compliance with the settlement’s terms.
“We are extremely proud of the landmark penalty and conduct relief announced today,” the FTC said in a statement. “The size of the $5 billion penalty, as well as the percentage of profits it represents, will provide significant deterrence, not just to Facebook, but to every other company that collects or uses consumer data.”
The two Democrats on the commission voted against the deal, which was approved 3-2.
Commissioner Rebecca Kelly Slaughter said in her dissenting
statement, “I do not share my colleagues’ confidence that the order or the monetary penalty will effectively deter Facebook from engaging in future law violations, and thus I fear it leaves the American public vulnerable.” Slaughter noted that $5 billion is the equivalent of what Facebook earns in a month.
FTC Chairman Joe Simons pointed out that the settlement would subject Facebook CEO Mark Zuckerberg and other company executives to individual civil and criminal penalties for future lack of compliance. But Slaughter said, “I strenuously object to the choice to release him and all other executives from any potential liability for their roles to date.”
The FTC accuses Facebook of violating terms of its 2011 settlement by deceiving users about information being shared with third-party developers, and failing to adequately screen developers and their apps. Slaughter essentially said Facebook’s failure to comply allowed “Cambridge Analytica’s expropriation of data and manipulation of voters.”
The political data consulting firm accessed the information of up to 87 million Facebook users without their consent. The FTC said it has reached settlements with Alexander Nix, former CEO of Cambridge Analytica, and Aleksandr Kogan, the researcher who collected Facebook user information.