Facebook has agreed to pay $5 billion and implement new protections on user information as part of a settlement with the Federal Trade Commission and Department of Justice.
A press release from the Justice Department states that the social media giant will “implement a comprehensive, multi-faceted set of compliance measures designed to improve user privacy and provide additional protections for user information.” Additionally, Facebook will pay the largest civil penalty ever collected by the federal government. The $5 billion fine is approximately 23% of its 2018 profit.
FTC Chairman Joe Simons said during a press conference that the “ground-breaking privacy settlement … holds Facebook and its executives accountable” for decisions relating to user privacy.
He called the one-year investigation, which was initiated after the Cambridge Analytica scandal last year, “exhaustive” and said it found Facebook “betrayed the trust of its users.” Cambridge Analytica was found to have used Facebook users’ data without their knowledge in support of political campaigns.
In a complaint filed Wednesday, the federal government alleges Facebook violated a 2012 order that settled accusations that the company’s information-sharing practices and privacy settings were deceptive trade practices. Facebook agreed to fix its practices and maintain a privacy program to address risks of giving other entities access to user data.
However, the complaint accuses the social media website of maintaining deceptive practices, continuing to allow third parties to access user data, inconsistently enforcing privacy policies and implying that 60 million users could activate facial-recognition technology when it was on as default.
Now, Facebook must consent to the FTC replacing the 2012 order with an amended order effective for 20 years, which “contains substantial new compliance terms drafted to ensure that Facebook and Facebok-controlled companies … improve their data-privacy practices, account for privacy concerns on an ongoing basis and have regular reporting obligations,” according to the complaint.
The FTC is ordering Facebook to appoint an independent assessor, approved by the government, to monitor its compliance with the amended order. The company will be required to submit to government privacy review reports for every new or modified product, service or practice it plans to implement. Additionally, Facebook will be required to create an Independent privacy committee with members designated through an independent nominating committee established by the company.
Gustav Eyler, director of Civil Consumer Protection, said during the press conference that members of the privacy committee must be familiar with data protection and privacy policies and they will meet at least four times a year.
Eyler added that CEO Mark Zuckerberg’s “power over privacy will be diffused … and diminished.”
FTC Commissioner Christina Wilson said Zuckerberg “likes to move fast and break things” and the agency must “create speed bumps to slow him down.”
Responding to the settlement, Facebook said in a press release that the agreement “will require a fundamental shift in the way we approach our work,” requiring a “sharper turn toward privacy on a different scale than anything we’ve done in the past.”
Zuckerberg said in a Facebook post that the changes “will take hundreds of engineers and more than 1,000 pople across our company to do this important work.”
“We have a responsibility to protect people’s privacy,” Zuckerberg said. “We already work hard to live up to this responsibility, but now we’re going to set a completely new standard for our industry.”