Facebook fined $ 7.5 billion for violation of privacy

Federal regulators have fined Facebook $ 5 billion (NZ $ 7.5 billion) for violating privacy and are instituting new surveillance and restrictions on its activities.

But they do not hold the CEO Mark Zuckerberg personally liable only in a limited way.

The fine is the largest that the US Federal Trade Commission has imposed on a technology company, but it will have no impact on a company that has a turnover of nearly $ 56 billion last year.

As part of the agency's settlement with Facebook, Zuckerberg will have to personally attest to his company's compliance with its privacy programs. The FTC has stated that false certifications could expose it to civil or criminal penalties.

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Some experts had thought that the FTC could impose a direct fine on Zuckerberg or severely limit his authority over the company.

"The magnitude of the $ 5 billion fine and the total relief of the law on driving is unprecedented in the history of the FTC," said Joe Simons, president of the FTC, in a statement. He added that the new restrictions are designed "to change Facebook's culture of privacy to reduce the likelihood of continuing violations".

Facebook does not admit any wrongdoing under the settlement.

Two of the five commissioners objected to the settlement and said they would have preferred litigation to get harsher sentences.

The commission opened an investigation on Facebook last year after learning that Cambridge Analytica data mining company had collected information on 87 million Facebook users without their permission. The agency announced on Wednesday that after its one-year investigation into the company, the US Justice Department will file a lawsuit on the grounds that Facebook would have "repeatedly used information and information." misleading parameters to undermine users' privacy preferences. "

The FTC was investigating whether this massive breakup violated a settlement that Facebook reached in 2012 after government regulators concluded that the company had repeatedly breached its confidentiality promises. This regulation required that Facebook obtain the consent of the user to share personal data so as to override its privacy settings.

The FTC said that Facebook's misleading disclosures about privacy settings allowed it to share users' personal information with third-party apps uploaded by their friends, but that the users themselves had not given their permission.

Privacy advocates have asked the FTC to limit how Facebook can track users – which would likely reduce its ad revenue, which implies that companies are able to show users targeted ads based on their interests and their behavior. The FTC has not specified such restrictions on Facebook.

"The proposed regulation does not change the business model or the practices that led to the recidivism," wrote Commissioner Rohit Chopra in his dissenting statement. He noted that the bylaw does not require "significant changes" to the company's structure or business model. "It also does not include restrictions on mass surveillance or advertising tactics of the company," he writes.

The fine is well above the agency's previous record in privacy breaches – $ 22.5 million – which she had treated Google in 2012 for having bypassed the privacy controls in the Apple Safari browser. Even tougher fines were imposed on companies in the non-technology sector, including a $ 14.7 billion fine against Volkswagen to deal with fraud charges on emissions tests. and to deceive the customers. Equifax will pay at least US $ 700 million to settle lawsuits and investigations regarding a data breach in 2017; the FTC was one of the parties. The money will probably go to the US Treasury.

The new 20-year agreement between the FTC and Facebook establishes an "independent privacy committee" comprised of Facebook administrators. Committee members must be independent, appointed by an independent nominating committee, and may only be fired by a "qualified majority" of Facebook's board of directors. The idea is to remove Zuckerberg's "unfettered control", the FTC said.

Since the Cambridge Analytica debacle erupted more than a year ago, Facebook is committed to doing a better job of comparing the data of its users. Nevertheless, other missteps have occurred since then.

In December, for example, the company Menlo Park, California, acknowledged that a computer fault had exposed photos of about 7 million users to a wider audience than expected. It also recognized the opportunity to give large technology companies such as Amazon and Yahoo extensive access to users' personal data, thereby exempting users from its usual privacy policies. And he collected call logs and SMS from phones running Google's Android system in 2015.

In the middle of all this, Zuckerberg and his chief lieutenant, Sheryl Sandberg, apologized on several occasions. In March, Zuckerberg unveiled a new vision of the privacy-focused social network, which focuses on private messaging and user-driven groups.

However, detractors and privacy advocates are not convinced that a fine or the new Facebook model is a substantial change.

The fine does not mean the closure of Facebook, although investors and corporate executives have been eager to leave it behind. Facebook is still under investigation in the United States and around the world, particularly in the European Union, Germany, and Canada. There are also broader antitrust concerns that have been the subject of Congressional hearings, although it is too early to see if they will materialize.

Matt Stoller, a member of the Open Markets Institute, who criticized Facebook, said the company should admit to having committed wrongdoing.

"There should be structural solutions to force competition in the social media market," he added. "One of the angles of competition is the protection of privacy.They will compete to create a safer space in order to retain their user base."