The Federal Trade Commission recently announced that Facebook CEO Mark Zuckerberg will have to be responsible for, and personally appear before, the federal regulators to settle its current privacy case filed by the commission.
The case includes a $5 billion penalty for the social networking platform. Additionally, Facebook will also have to pay $100 million to settle its case with the Securities and Exchange Commission. The case was filed by the SEC against Facebook because it made misleading disclosures about the risks on the misuse of users’ data.
In addition to the penalty imposed on Facebook, the FTC is also requiring Zuckerberg to submit quarterly compliance reports to the FTC as well as to its board of directors. Failure to submit these reports means a violation of the FTC agreement and will have the CEO facing civil and criminal charges anew.
These penalties and other requirements came about after the FTC rules that Facebook violated the terms of its 2011 settlement with the FTC. In the said settlement, Facebook promised to protect user data from broad sharing with third-party apps. Aside from this, the FTC also said that Facebook has committed new violations.
James Kohm, head of the FTC enforcement unit cited two major incidents in which Facebook lied to users and thus violated the 2011 settlement. The first one was when Facebook solicited phone numbers in the guise of collecting them to verify users’ identify to reset their passwords when needed. Kohm said that Facebook used those phone numbers for advertising purposes.
“There’s no way that the CEO can bury his head in the sand,” James Kohm, head of the FTC’s enforcement unit, told NPR. “There’s no ostrich defense.”
Also, the FTC said that Facebook conducted facial recognition tracking on 60 million users without proper consent. According to the regulators, Facebook must notify users who were affected by the said facial tracking and offer to delete the collected data.
As a response, Facebook said that the company knows its responsibility and vow to resolve both the SEC and FTC investigations. “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,” said a statement released by the social media giant.
On the Facebook blog, company said it now has a responsibility to protect people’s privacy. As such the company says it’s going to set a completely new standard for the social networking industry.