SAN JOSE, Calif. _ The Federal Trade Commission has fined Facebook $5 billion in a settlement the agency promises will result in real change in how the social networking giant handles its users' information.
The FTC on Wednesday confirmed numerous reports that it approved an "unprecedented" settlement on July 24 _ it includes the largest privacy fine ever _ after a yearlong investigation into whether the company had violated terms of a previous privacy settlement.
Among key parts of the new, 20-year deal: The Silicon Valley company must create a board-level privacy committee, appoint privacy compliance officers who cannot be removed by Facebook's chief executive, and provide quarterly and yearly certifications of compliance with the settlement's terms.
"We are extremely proud of the landmark penalty and conduct relief announced today," the FTC said in a statement. "The size of the $5 billion penalty, as well as the percentage of profits it represents, will provide significant deterrence not just to Facebook, but to every other company that collects or uses consumer data."
But the two Democrats on the commission voted against the deal, which was approved 3-2.
"I recognize the settlement's historic nature," Commissioner Rebecca Kelly Slaughter said in her dissenting statement. "But I do not share my colleagues' confidence that the order or the monetary penalty will effectively deter Facebook from engaging in future law violations, and thus I fear it leaves the American public vulnerable." Slaughter, who noted that $5 billion is the equivalent of what Facebook earns in a month, said she had wanted to recommend litigation against the company and CEO Mark Zuckerberg.
FTC Chairman Joe Simons and the majority of the commission pointed out that the settlement would subject Zuckerberg and other company executives to individual civil and criminal penalties for future lack of compliance. But Slaughter said "I strenuously object to the choice to release him and all other executives from any potential liability for their roles to date."
The FTC accuses Facebook of violating terms of its 2011 settlement by deceiving users about information being shared with third-party developers and failing to adequately screen developers and their apps. Slaughter essentially said Facebook's failure to comply allowed "Cambridge Analytica's expropriation of data and manipulation of voters."
The political data consulting firm, which was used by the campaigns of Donald Trump and others, accessed the information of up to 87 million Facebook users without their consent. The FTC also said it has reached settlements with Alexander Nix, former CEO of Cambridge Analytica, and Aleksandr Kogan, the researcher and developer who collected Facebook user information through a personality-quiz app.
Facebook has not yet returned a request for comment.
The settlement, which also covers Facebook-owned WhatsApp and Instagram, also requires Facebook to kick out developers and apps that don't comply with privacy policies. In addition, the company must make clear and get consent for its use of facial recognition, considering the FTC accused it of misrepresenting the amount of control users had over opting into use of the technology.
Privacy and consumer advocates, like some politicians including Democratic presidential candidates, have called for breaking up Facebook. The FTC announcement came a day after the Justice Department confirmed it has started a broad antitrust review of "market-leading online platforms" it did not name.
