For Facebook, it’s a $5 billion fine and a “fundamental shift” in how the social media giant addresses privacy practices.
As reported on Wednesday, the Federal Trade Commission has said that it will fine Facebook $5 billion in the wake of the company’s mishandling of millions of users’ personal data.
But beyond the financial settlement, the settlement also mandates that Facebook change the ay it addresses privacy issues. Among the tenets of the settlement, the company must establish a board committee that is focused on privacy, and as reported by news outlets including CNBC, CEO Mark Zuckerberg will report certified statements to the FTC, on a quarterly basis, on how the firm is protecting user data and privacy.
The FTC has said that false statements could subject Zuckerberg and other corporate officers to personal liability, including civil and criminal penalties.
The fine and the new corporate actions cap an FTC investigation into Facebooks’ alleged violation of a 2012 consent decree, where the company had pledged it would be transparent in how it used data.
The settlement comes in the wake of news that the company had exposed data tied to as many as 87 million users, and that the data had been used by Cambridge Analytica, a political analysis company.
The FTC had issued a complaint that said Facebook “used deceptive disclosures and settings” that violated the 2012 consent order, and that Facebook had used data to target ads to its end users.
Separately, as reported by CNN, the Securities and Exchange Commission announced that Facebook had also agreed to pay $100 million to settle “charges… for making misleading disclosures regarding the risk of misuse of Facebook user data.”
In a Wednesday statement on the FTC fine and the changes that lie ahead for the company, Zuckerberg said that “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.”
There was a separate statement from Facebook general counsel Colin Stretch, who said in his own statement via blog post that there will be a “fundamental shift” in tackling privacy issues: “Going forward, our approach to privacy controls will parallel our approach to financial controls, with a rigorous design process and individual certifications intended to ensure that our controls are working — and that we find and fix them when they are not.”
In reference to how those actions will be structured, Facebook’s privacy committee will appoint two compliance officers. The FTC also has mandated stricter oversight over third party apps.