Facebook and FTC reach settlement on privacy violations

Facebook has settled with the U.S. Federal Trade Commission over charges of violating federal privacy regulations, including allegations that the company was sharing the personal data of millions of its users with online advertisers.

The settlement clears the eight charges the FTC brought against Facebook, including a charge that the social media site exposed users' personal data beyond the scope of what was publicly acknowledged or what advertisers needed for online advertising purposes. Another charge: Online tools that were suppose to limit the sharing of a user's personal data didn't function as promised.

Under today's agreement, Facebook is barred from making such "misrepresentations about the privacy or security of consumers' personal information," says the FTC.

Consumers Union, the policy and advocacy division of Consumer Reports, today praised the FTC settlement. Ioana Rusu, regulatory counsel for Consumers Union, said:

When you share private, personal information with a company, that information should be treated with care and respect, and that company should adhere to the privacy preferences you choose. This settlement upholds that principle. It sends a strong message to companies that they must live up to the privacy promises made to consumers.

According to FTC Chairman Jon Leibowitz, the agreement also requires Facebook to take several steps to protect the online privacy of its millions of users. As previously reported, Facebook will be required to get specific user approval before making any changes to its online privacy schemes and will face mandatory third-party audits of its privacy programs every two years for the next 20 years.

Facebook will also create two new positions: a chief privacy officer for policy and a chief privacy officer for products, to be staffed respectively by Erin Egan, a former partner with Covington & Burling, and Michael Richter, Facebook's chief privacy counsel.

Today's settlement came with no monetary fines. In a teleconference with news reporters, Chairman Leibowitz said the FTC has very limited jurisdiction to impose such damages and that was a "matter of Congress." He did note that if Facebook is found in violation of today's settlement, the site could face fines of up to $16,000 per violation per day.

For more information about how to protect your privacy, see Consumer Reports' guide to online security which includes the 7 things you should stop doing on Facebook.

Facebook Settles FTC Charges That It Deceived Consumers By Failing To Keep Privacy Promises [FTC]
Facebook settles FTC complaint over deceptive privacy practicesFacebook Agrees to New Privacy Measures in FTC Deal [Wired]

—Paul Eng