On July 24th, 2019, the Federal Trade Commission announced it is imposing a record-breaking $5 billion penalty and sweeping new privacy restrictions on Facebook. This is the largest fine ever imposed on a technology company and it marks the first time the FTC has used its powers under the law to penalize a company for privacy violations.
The FTC aims to protect the privacy of millions of Facebook users subjected to the company’s privacy intrusions and data misuse for years. These new restrictions are aimed at changing the way Facebook does business and protecting user privacy in the future.
In this article, we’ll explore the new privacy restrictions imposed by the FTC on Facebook.
Overview of FTC’s new privacy restrictions on Facebook
On July 24, 2019, the Federal Trade Commission (FTC) imposed a $5 billion penalty and sweeping new privacy restrictions on Facebook, following an investigation into how the company collected and misused users’ personal information. Under the final order, Facebook must create a comprehensive privacy program to address privacy risks and meet FTC standards relevant to user-facing products. The FTC’s investigation revealed that Facebook failed to take reasonable steps to protect users’ personal information from unauthorized access despite multiple warnings about lax security practices.
The FTC also imposed data protection requirements and greater protection for minors in its order. The new restrictions require Facebook to annually assess potential risks posed by its products and services, secure changes with appropriate administrative safeguards, document any risks related to user privacy or data security breach incidents, disclose those risks upon request to third parties such as researchers or government authorities, provide notice of any material changes made in security practices or policy changes that might affect users’ agreements or access privileges with the company, and provide training to employees related to data security protocols applicable within their respective areas of responsibility as applicable under the law.
The news of this penalty has sent shockwaves throughout Silicon Valley because its immense size is much larger than most previous fines handed down by the FTC; this will likely shift how companies use customer data going forward. This could signal an era where social media platforms become more transparent with users; however, how much this decision will affect companies outside the purview of US regulatory bodies such as Facebook remains uncertain.
FTC Imposes $5 Billion Penalty and Sweeping New Privacy Restrictions on Facebook
In July 2019, the Federal Trade Commission (FTC) announced that it had settled with Facebook. The settlement imposed a hefty $5 billion penalty on Facebook for its mishandling of user data and sweeping new privacy rights for users.
This includes new data security and privacy safeguards that Facebook must implement. In this article, we will explore the details of the settlement and its implications for Facebook.
Overview of FTC’s $5 Billion penalty
The Federal Trade Commission (FTC) has imposed a record-breaking $5 billion civil penalty on Facebook and is imposing new privacy restrictions on social media platforms. This is the largest monetary penalty ever obtained by the FTC against any technology or data company.
The financial penalty, stronger requirements to maintain user privacy and heightened oversight of future consumer interactions represent significant steps to address Facebook’s past missteps on privacy.
The FTC has charged Facebook with violations of its 2011 Consent Decree, which required the company to improve user privacy protections and be transparent regarding its handling of consumer data. Unfortunately, the only enforcement action available to the FTC was a hefty financial penalty—which eventually settled at $5 billion—along with heightened restrictions and independent advisors overseeing significant changes in how Facebook will protect user data in the future.
These new requirements include limiting how much data Facebook can collect about users if their age cannot be verified, creating an independent board to review controversial posts and other decisions related to customer data, establishing an encrypted browsing mode for registered users when visiting websites owned by third-party apps that use Facebook’s platform services, as well as an external audit committee which will assess how well these measures are being implemented. In addition, within 18 months from now Facebook must also create a comprehensive program for security clearances for all employees who have access to consumer data as a condition for continued employment at the company.
What the penalty will fund
The US Federal Trade Commission (FTC) is implementing a record-setting $5 billion penalty and sweeping new privacy restrictions on Facebook. These new rules will be implemented to help protect the privacy of users and their data.
The money from the penalty will be used to create a fund which will finance grants for research, technical assistance, public education, and training programs concerning the impact of technology on privacy, security, affordability and competition in the U.S. It will also fund protocol development that addresses similar issues. In addition, this fund will allow independent research organizations to create studies that can better understand how user data is collected, shared and used.
Additionally, the FTC’s order requires Facebook to establish an independent privacy committee that would have authority over decisions about how user data is collected & shared in addition to other actions within Facebook’s platform. The committee must consist of independent members with an unrelated majority of board members appointed by a disinterested majority of board directors and members with specific qualifications related to digital technology &/or privacy matters. Furthermore, this committee may make decisions even if it goes against C-level executives or other upper officials’ desires.
Sweeping New Privacy Restrictions
The Federal Trade Commission (FTC) has imposed a $5 billion penalty and new privacy restrictions on Facebook. This is the largest penalty ever imposed on a tech company, resulting from the FTC’s investigation into Facebook’s handling of user data.
In addition to the penalty, Facebook must establish a comprehensive privacy program and submit to regular privacy reviews.
Let’s take a closer look at the new privacy restrictions that are being imposed on Facebook.
Overview of sweeping new privacy restrictions
The United States Federal Trade Commission (FTC) recently imposed a record-breaking $5 billion penalty and sweeping new privacy restrictions on Facebook, Inc. The FTC found that Facebook misled users and violated a previous 2012 consumer privacy settlement with the FTC, regarding how users’ data was collected, shared and used.
This settlement requires Facebook to restructure its privacy practices across its products by creating an “Independent Privacy Committee” within the company to oversee and monitor the development of innovative privacy policies and establish more stringent user interactions when using third-party apps. Additionally, it must create a comprehensive data security program led by a third-party assessor who will review how it processes and safeguards user data.
The newly implemented sweeping new privacy restrictions also require Facebook to:
- Cease their false representation about user control of data through their Platform permissions;
- Cease misrepresenting any user decision when consenting to controlling access to location information;
- Make it clear that facial recognition features are available and collect biometric information;
- Make sure that pairing collected any personal information is limited by design;
- Provide source code reviews or assessments of technologies of those they partner or contracted with;
- Engage in third party assessments at least every two years concerning their compliance with these restrictions.
These sweeping new privacy restrictions replace the 2012 consent decree, dramatically expanding upon the roles responsible for safeguarding user’s privacy on the popular social network platform. As such, this expansive measure effects all of Facebook’s services – Messenger, Instagram and WhatsApp – ensuring more effective control over 3rd parties accessing any personal information from Windows Operating System powered devices supporting these applications such as laptops or smartphones.
How the restrictions will affect users
The new privacy restrictions the Federal Trade Commission (FTC) is imposing on Facebook have great implications for users. By agreeing to pay a $5 billion penalty and enacting more stringent privacy safeguards, Facebook must take significant steps to protect user data. Here are just a few of the changes that will be coming with these new regulations:
-Increased Disclosure: Facebook must now provide clear, plain-language explanations of its data collection practices and give users more insight into how their data is used.
-User Control: Users will have greater control over what types of information they share, who see their posts and how their data is used.
-Data Security Measures: Facebook must also implement multiple layers of security for protecting user data and providing additional oversight for accessing said data.
These restrictions are expected to have far reaching consequences for users, ranging from increased control over personal information to enhanced transparency into the company’s practices to improved data security measures.
Impact on Facebook
The Federal Trade Commission (FTC) recently imposed a $5 billion penalty and new privacy restrictions on Facebook due to its ongoing privacy and data security issues.
These restrictions will majorly impact how Facebook collects, uses, and shares its users’ data.
This article will explore what these restrictions mean for Facebook and its users.
How the new restrictions will affect Facebook’s business
The Federal Trade Commission (FTC) recently announced a record-setting $5 billion penalty and sweeping new privacy restrictions on Facebook. The FTC’s enforcement is meant to hold Facebook accountable for its “unfair and deceptive” practices, especially about collecting and using user data.
The key points of the new restrictions include:
- a mandatory independent privacy committee at Facebook, made up of board members who Mark Zuckerberg cannot remove
- Facebook will have to submit all privacy changes to the FTC before rolling them out, as well as subject itself to stricter monitoring
- forming a designated team of compliance officers that must tell the Board of Directors about any potential violations within 12 hours
- privacy and programming officers will have authority over decisions related to data security and usage
- Facebook is also prohibited from using third party data or patient information in advertising without explicit informed consent from users.
These new regulations will significantly alter how Facebook does business, affecting not just the company itself but its users. At a minimum, users should expect more transparency regarding what data is collected about them by Facebook, less targeted advertising based on their personal information, independent oversight regarding user data collection practices, increased efforts in privacy protection technologies, and better security measures against data breaches.
In addition, businesses that rely on access to user data or advertise on Facebook’s platform may have their strategies shaken up or need readjustments due to these new requirements. Of course time will tell just how severely these restrictions affect both sides of the equation. Still, one thing is clear: companies like Facebook now have an additional layer of accountability enforcing accountability when collecting personal information online.
What steps Facebook is taking to comply with the new restrictions
In response to the new restrictions, Facebook is implementing several measures to prevent user data from being misused. These include updating its business practices and corporate policies.
Specifically, Facebook will create a separate board of independent directors with fiduciary and privacy oversight. The new board will have the authority to review and approve business decisions and decisions around privacy controls and data usage protections. Facebook also promises to designate specific compliance officers who will be in charge of ensuring that the company is respecting user privacy rights.
In addition, Facebook has agreed to perform annual third-party audits on its security practices, using an external auditing firm approved by the FTC. During these audits, the auditing firm will examine whether the company’s data security processes adequately protect customer data against unauthorized access or misuse by third parties.
The company has also agreed to create an independent ombudsman position that handles complaints at its advertising technology vendors. This ombudsman position is responsible for resolving users’ abuse complaints regarding how their personal information is used in online advertising campaigns. In addition, he/she can investigate any dubious activity related to how user personal information might be abused or illegally collected through third-party applications or other sources that do not comply with the law or Facebook’s Terms of Service (ToS).
Finally, Facebook has committed itself to spend an estimated $3 billion over three years on developing features designed specifically for user privacy – such as secure messaging platforms like Private Messages and Conversations introduced back in January 2020 – as well as improving existing protection systems such as login notifications, two-factor authentication requirements for high-risk operations like password changes,etc., helping users better understand which information they share with which apps and providing additional ways to manage who can see their content when posting publicly.
Conclusion
The FTC has imposed a substantial $5 billion fine and new sweeping privacy restrictions on Facebook, the largest ever by the FTC against a tech company.
This new set of privacy restrictions is the biggest step yet in regulating online personal data and the first time the FTC has held a large tech company fully accountable for its privacy practices.
In this article, we have discussed the implications of the FTC’s new penalties and privacy restrictions, and how they may affect Facebook’s operations and users in the future.
