"This enforcement action provides immediate protections for Facebook users and the $5 billion dollar civil penalty will deter future privacy and data security violations not only by Facebook, but by all other companies in the United States."
San Francisco - 24 July 2019
2. SOUNDBITE (English) Adam Schwartz, Electronic Frontier Foundation, attorney:
"The settlement today between Facebook and the FTC is grossly inadequate to the task of protecting consumers from the surveillance- based advertising system that Facebook runs. Most importantly the settlement today contains no limits at all on how Facebook collects and uses and shares the personal information of its users."
3. Screen with Facebook web page announcing settlement
4. SOUNDBITE (English) Adam Schwartz, Electronic Frontier Foundation, attorney:
"We think that for a company the size of Facebook $ 5 billion is not a sufficient incentive for them to refrain from violating people's privacy in the future. And so overall we view the agreement today between Facebook and the FTC as a missed opportunity that is not enough to protect consumer data privacy."
5. SOUNDBITE (English) Pearl Tin, Facebook user and San Francisco resident
"$5 billion sounds like a lot of money but to Facebook it's sort of a drop in the bucket. So I wonder how seriously they'll take it and if there will be some real changes with privacy."
6. SOUNDBITE (English) Reed Milnes, non-Facebook user and San Francisco resident
"I don't want to say I'm glad but I think it's appropriate. You know their privacy policies are something that I've always been skeptical of, and this is something that I think brings that into sharp focus."
Facebook users and critics expressed skepticism and disappointment Wednesday over the Federal Trade Commission's settlement with the social media company, which includes a $5 billion fine for privacy violations and new oversight and restrictions on its business.
The fine is the largest the Federal Trade Commission has levied on a tech company, though it won't make much of a dent for a company that had nearly $56 billion in revenue last year.
As part of the agency's settlement with Facebook, Zuckerberg will have to personally certify his company's compliance with its privacy programs. The FTC said that false certifications could expose him to civil or criminal penalties.
The FTC's new 20-year settlement with Facebook establishes an "independent privacy committee" of Facebook directors. The committee's members must be independent, will be appointed by an independent nominating committee and can only be fired by a "supermajority" of Facebook's board of directors.
The commission opened their investigation after revelations that data mining firm Cambridge Analytica had gathered details on as many as 87 million Facebook users without their permission.
The agency said Wednesday that following its yearlong investigation of the company, the Department of Justice will file a complaint alleging that Facebook "repeatedly used deceptive disclosures and settings to undermine users' privacy preferences."
Facebook does not admit any wrongdoing as part of the settlement.
While the company looks set to prosper in the wake of the FTC case, it faces a series of other investigations into its privacy practices in Europe and across the U.S. Concerns over the limits of the just-settled probe could fuel efforts to craft tougher privacy laws at the state and federal level.
The social network is also gearing up to fight investigations into its allegedly anticompetitive behavior, such as Facebook's habit of buying would-be rivals like Instagram and blatantly duplicating features introduced by competing services.
The FTC penalties, viewed by some as a stunning rebuke to the social network, might well crush a smaller firm. But they seem unlikely to faze Facebook — the fine, for instance, amounts to less than 10% of Facebook's annual revenue and not even a quarter of its annual profits. Some critics charge that that the FTC didn't deliver much more than a slap on the wrist.
Wall Street seems to agree. Facebook's stock price climbed higher Wednesday after the deal was announced. The company is worth much more than it was when its Cambridge Analytica privacy scandal erupted back in March 2018. On Wednesday, Facebook's market value hovered around $575 billion — roughly $40 billion above where it stood before the news of the Cambridge abuses broke.
Earlier this year, CEO Mark Zuckerberg unveiled a new "privacy focused" vision for the company that centers on private messaging and encrypted communications. The details are scant. But it shows that the company is thinking years into the future even as regulators are investigating and punishing it for years-past violations.
In a Facebook post Wednesday, Zuckerberg vowed to "make some major structural changes to how we build products and run this company" as a result of the settlement. "We have a responsibility to protect people's privacy. We already work hard to live up to this responsibility, but now we're going to set a completely new standard for our industry."
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