An agreement with the Federal Trade Commission (FTC) requires Facebook to pay a $5 billion penalty, to implement a new privacy and information protection framework, and to provide the FTC with new monitoring tools after an investigation launched following the Cambridge Analytica events. Taken from a Time news article,
“Facebook agreed to pay a record $5 billion to resolve a U.S. investigation into years of privacy violations, a settlement that increases the board of directors’ responsibility for protecting users’ data while changing little about the company’s lucrative advertising business.
The agreement, announced Wednesday by the Federal Trade Commission, will for the first time end Chief Executive Officer Mark Zuckerberg’s final authority over privacy decisions, creating an independent privacy committee of directors on the company’s board, according to an FTC statement.
The accord will also require Facebook to keep a tighter leash on third-party apps, perform regular sweeps for unencrypted passwords and refrain from using telephone numbers obtained for security purposes for advertising. It also calls for the company to conduct privacy reviews of new offerings and submit to new privacy certifications and assessments.
The agreement, which was approved by the FTC’s Republican majority by a vote of 3-2, does little to alter Facebook’s structural data collection practices, which are at the heart of its business model. While the fine is steep, it’s far from devastating for Facebook, which reported sales of almost $56 billion in 2018. It had set aside $3 billion in anticipation of the fine.”
“The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC,” Chairman Joseph Simons said in a statement. “The relief is designed not only to punish future violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.”