[WASHINGTON] Facebook Inc agreed to pay a record US$5 billion to resolve a US 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. Read more at The Business Times.
[WASHINGTON] Facebook Inc agreed to pay a record US$5 billion to resolve a US 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, 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 US$56 billion in 2018. It had set aside US$3 billion in anticipation of the fine.
The deal is also unlikely to mollify critics in Congress and among privacy advocates who have called for accountability for Mr Zuckerberg, fines that represent a greater share of the company's revenue and the unwinding of Facebook's acquisition of Instagram and WhatsApp. The FTC also announced separate settlements with the now-defunct political consulting firm, its former CEO Alexander Nix, and an app developer who worked with the company, Aleksandr Kogan.
Under the settlement, Facebook will have to report data compromises to the FTC if more than 500 users are affected, terminate apps that fail to certify their compliance with company policies and provide greater notice of its use of facial recognition. Facebook had misled users to think they could opt in to a facial recognition feature, even though it was turned on by default, the FTC said.
While the new agreement removes a major burden weighing on the Menlo Park, California-based company, it is still grappling with investigations by other authorities in the US and the European Union. European officials are pursuing multiple data-protection investigations, while the city of Washington, D.C.
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