Facebook-FTC settlement: What you require to understand about the $5 billion offer


Revealed: The Secrets our Clients Used to Earn $3 Billion

Facebook reached a record $5 billion settlement with the FTC today.

Graphic by Pixabay/Illustration by CNET

After more than a year of wrangling, Facebook and the Federal Trade Commission lastly accepted settle an examination into the social media network’s personal privacy accidents. The outcome: Facebook will produce a brand-new personal privacy council, CEO Mark Zuckerberg will be needed to license the business’s habits, and the social media network will need to — we sort of can’t think we need to compose this however we do — secure your password.

Oh, yeah. There was likewise a $5 billion fine, a charge the FTC called “unprecedented.”

The settlement follows the FTC checked out whether Facebook must have done more to avoid Cambridge Analytica, a now-defunct consultancy that dealt with President Donald Trump’s project, from siphoning off the information of as much as 87 million users. Specifically, the FTC was worried that Facebook’s failure to secure that information broke an earlier arrangement the business made to secure user personal privacy. 

On April 23, a federal court authorized the settlement in between the FTC and Facebook, which was revealed in July.

Here’s all you require to understand about the settlement and how it impacts you.

I’m a Facebook user. How do I get a few of that $5 billion?

Short response: You do not. Longer response: Facebook users weren’t economically hurt, though being hammered with political advertisements may appear like it should have settlement. So no fund is being established to pay victims. Instead the cash will go directly to the United States Treasury.

We understand that’s frustrating, especially if you have actually been following the $700 million settlement that Equifax struck after it was hacked. The FTC stated the 147 million Equifax consumers whose information was swiped might declare settlement for expenses triggered by the security breach, consisting of unapproved charges to your account and cash invested to secure yourself from the risk of identity theft. About $300 million from the settlement will be reserved to pay customers impacted by the hack.

Well, that’s frustrating. What’s this about a brand-new personal privacy committee?

The arrangement needs Facebook to form a personal privacy committee at the board of directors level. The committee will do something: supervise personal privacy at Facebook. And all the members will be independent, suggesting their day tasks can’t be at Facebook.

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Facebook FTC settlement puts Zuck personally on the hook


The committee, when it is created, will have a lot of power. It will be able to remove privacy compliance officers, who will be responsible for executing the company’s policies. It will also be able to fire the company’s privacy assessor, a newly created position that will evaluate Facebook’s policies and produce a report every two years. (The committee will need the FTC’s approval to remove the assessor.) 

The committee members are also well protected. A member can only be fired without cause by a supermajority of voting shares.

I heard something about a new privacy program at Facebook. What’s that about?

In broad brush, Facebook has to conduct privacy reviews of all new or modified products and services. That could be apps it designs or physical products, like its Portal video chat device. The company has to share written privacy reviews with Zuck (which seems like common sense), as well as the assessor and the FTC, if it wants to have a peek. The privacy program has to include other Facebook services, such as WhatsApp and Instagram.

So Zuck is on the hook?

Yes, for anything that happens in the future. The settlement requires him to certify that Facebook is in compliance with its privacy program every quarter. He could face “civil and criminal penalties” if he doesn’t or gets it wrong. He also isn’t the boss of the independent privacy committee or assessor.

Anything else I need to know about the settlement?

There are some interesting — and scary — loose ends. The social network has to encrypt user passwords, can’t use phone numbers given as part of two-factor authentication for advertising, can’t retain personal information that users deleted on its servers and can’t let employees have free access to user information.

That’s it, right?

As long as you don’t count the controls that are being put in place for facial recognition. Basically it boils down to this: Facebook has to get your permission on facial recognition matters before it does anything. 

What comes next?

Facebook is still facing regulatory scrutiny from the FTC and other government agencies. The FTC told the company in June it was investigating the social media giant for antitrust concerns. The Department of Justice also said that it’s kicking off an antitrust review into internet giants and how they achieved market power, signaling it would target social media companies like Facebook.

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