US fines Facebook $5 billion for repeated privacy violations

United States government on Wednesday issued an unprecedented rebuke of Facebook after a year of massive privacy mishaps, charging that the company deceived its users and “undermined” choices they made to protect their data as part of a settlement that requires the tech giant to pay $5 billion and submit to significant federal oversight of its business practices.

Sixteen months after opening its investigation, the Federal Trade Commission alleged that Facebook had repeatedly misled its 2.2 billion users. The agency argued that the social-networking company was not upfront about the ways app developers, advertisers, and others gained access to users’ personal data from the content they “liked” to the phone numbers they stored in a breach of Facebook’s previous promise to improve its privacy protections online Washington said.

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As a result, the settlement between the FTC and Facebook includes the largest fine in US history for a privacy violation, and it grants federal regulators unparalleled access to the social-networking giant’s business decisions for the next two decades allowing regulators to scrutinize the actions of Facebook’s leaders, including chief executive Mark Zuckerberg, and its efforts to launch new products and services.

Facebook, however, did not have to admit guilt for its misdeeds.

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” FTC Chairman Joe Simons said in a statement.

But even within the FTC, serious concerns emerged Wednesday that the punishments do not alter the way Facebook collects and monetizes its users’ data in the first place. The fears prompted the agency’s two Democratic members, Rohit Chopra, and Rebecca Kelly Slaughter, to vote against approving the settlement earlier this month.

In their first public comment on the settlement, the two Democrats said in their dissenting statements that the fine should have been higher, and the remedies much tougher, if the FTC hoped to truly change Facebook. They also expressed alarm that the agency may have given Zuckerberg, his fellow executives and Facebook a complete pass on any other privacy mishaps that may have occurred in the past, a rare move they said would hamstring the government in holding Facebook accountable again.

While calling the settlement “historic,” Slaughter said she believes that the FTC should have sued Facebook and named Zuckerberg in a lawsuit. “The Commission would better serve the public interest and be more likely to effectively change Facebook by fighting for the right outcome in a public court of law,” she wrote.

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