DoJ, FTC Fine Facebook $5B Over Data Privacy

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The Department of Justice (DoJ), along with the Federal Trade Commission (FTC), announced today that Facebook has agreed to pay a $5 billion fine regarding data privacy claims. The fine is the largest civil penalty ever imposed by the FTC.

“The Department of Justice is committed to protecting consumer data privacy and ensuring that social media companies like Facebook do not mislead individuals about the use of their personal information,” said Assistant Attorney General Jody Hunt for the DoJ’s Civil Division. “This settlement’s historic penalty and compliance terms will benefit American consumers, and the Department expects Facebook to treat its privacy obligations with the utmost seriousness.”

The DoJ also said that Facebook will also be required to “to implement a comprehensive, multi-faceted set of compliance measures designed to improve user privacy and provide additional protections for user information.”

“Despite repeated promises to its millions of worldwide users that they could control how their personal information is shared, Facebook took steps to undermine consumers’ choices,” said FTC Chairman Joe Simons. “The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC. The relief is designed not only to punish previous violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.”

According to a report from the New York Times, the settlement was approved on a 3-2 vote, with the Commission’s Democrats dissenting because they saw the settlement as too lenient.

In its complaint, the Federal government is alleging that “Facebook violated an administrative order issued by the FTC in 2012 by misleading users about the extent to which third-party application developers could access users’ personal information.” Additionally, the complaint, which was filed today, said that the social media giant also violated the Federal Trade Commission Act by “deceiving users about their use of this and additional sensitive information.”

Under the settlement, Facebook will be required to appoint an “independent assessor to monitor Facebook’s conduct, privacy reviews for all new or modified Facebook products.” The company will also have to establish a new Independent Privacy Committee on Facebook’s Board of Directors and annual compliance certifications by Mark Zuckerberg, Facebook’s CEO. Finally, the settlement adds in multiple new reporting and record-keeping requirements. As part of the agreement, the DoJ and FTC agreed to share responsibility for monitoring and enforcing Facebook’s compliance with the settlement’s terms.

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