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What the FTC Facebook settlement means for consumers

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The next time users visit Facebook, things might not look different, but big changes are brewing behind the scenes. The FTC’s record-breaking $5 billion settlement requires Facebook to conduct a massive overhaul of its consumer privacy practices. The settlement also makes major changes to Facebook’s operations and CEO Mark Zuckerberg no longer has sole control over privacy.

First, some background. Facebook is a social networking site, but it makes money by serving up targeted ads based on users’ personal information. Many consumers are hesitant about sharing certain data, so Facebook calms that concern by promising that people can control the privacy of their information through the platform’s privacy settings.

FTC Settlement with Facebook

The FTC sued Facebook in 2012 for making misleading promises about the extent to which consumers could keep their personal information private. For example, Facebook told users they could select settings to make information available just to “friends.” But despite that promise, Facebook allowed apps used by those friends to access consumers’ information, a decision that put money in Facebook’s pocket. The 2012 FTC order put penalties in place if Facebook made misleading statements in the future about consumers’ control over the privacy of their personal information.

According to the FTC, that’s just what happened. Facebook violated the order by again giving companies access to information that consumers said they didn’t want to share. The FTC also alleges Facebook made other misleading statements about how it used facial recognition, consumers’ cell phone numbers, and other personal data.

Here are three things to know about the FTC’s history-making settlement with Facebook.

Facebook will pay the largest civil penalty by anyone anywhere ever in a privacy case.

The $5 billion settlement is one for the record books. It’s the largest civil penalty ever imposed on a company for violating consumers’ privacy and it’s one of the largest penalties assessed by the U.S. government for a violation of any kind. That tells you just how seriously the FTC takes it when companies break their privacy promises. The settlement also sets a new benchmark if companies fail to honor their promises in the future. (In case you’re wondering about the $5 billion, by law, it goes to the general fund of the U.S. Treasury. It does not go to the FTC.)

The settlement requires fundamental changes at Facebook and removes CEO Mark Zuckerberg as the company’s consumer privacy decision maker.

The order establishes a new era of privacy transparency at Facebook and at WhatsApp and Instagram, which Facebook owns. It creates an independent committee of Facebook’s board of directors to oversee privacy decisions and requires an independent third-party assessor to evaluate the effectiveness of Facebook’s privacy program. Mark Zuckerberg also must certify every quarter that Facebook is in compliance with the new privacy program. Any false certification will be subject to civil – and criminal – penalties.

As Facebook puts its new privacy program in place, consumers should take a fresh look at their settings. 

How much personal information do you really want to share? A platform’s default settings may not be your most privacy-protective option. Whether it’s Facebook or any other platform, revisit your toolbars, privacy settings, etc., to make sure the system is set up to honor your choices and preferences.

 

Comments

This is all well and good but it should also be a wakeup call to avoid putting information on Facebook or any other social website that you do not want to go public.

Thank you for going after Facebook.

FTC, thank you, you rock!! Hopefully this will stopall unsolicited mail. The filth that gets sent is disturbing!! I always unsubscribe me, even though I never subscribed to the filth!! It is very disturbing! I hope it all goes away. I get probably 10 unsolicited calls a day!! No caller ... No answer!! Thanks for being our watchdog!!

Where does this $5 billion go? Who pockets the money?

The $5 billion, by law, goes to the general fund of the U.S. Treasury.

Pardon me if I sound a bit skeptical, but I was hacked and lost my original fb page. I can't even remember all of my friends from several states that I have lived. I'm still upset about it and don't want to go through that again. Some of my friends won't accept my friend request because a couple of days or wks before I lost my page, I made the statement that I would never change my Facebook page, so old friends won't friend me. It's very disturbing that this has happened. I'm 64 years old, and disabled so I can't get a job, I just spend a lot of time on my computer. I sure do hope you are successful with these changes.

Thank you for clarifying this issue based on such a large fine Facebook has to pay. Now, I know why so many people had access to my post! I wanted it to be private but, of course, it wasn't. Thank you again, I will check my settings and see what happens.

The only real solution to these privacy deceptions is not to give your real name, addresses, phone numbers etc. on social media. That also includes selfies and the faces of family members, and in particular children. The data and info breachers can only get what you give them.

The money should go directly to FTC to continue the fight against private information thieves. US Treasury general fund puts money in the hands of the politicians who allow these transgressions to exist.

Since it affects us will we be compensated?

The $5 billion, by law, goes to the general fund of the U.S. Treasury.

Bravo! Thank you. Keep up the good fight!

Thanks FTC. Yea!

Thanks !FTC for looking out for my info i have never been very trusting of FB for lot of different reasons and the issues i have had have never been resolved i dont use it very often and feel like theres a lot info there i know nothing about ...i hope my friends and i learn to be more careful i have been a victim of idenity theft most of my life and its made even the simpliest things in life hard for me but sad part is its taken me most my life to realize that was the problem and no amount of money can get that back for me so thanks again for all you do to protect my families future. Ky Gypsycat

Where is the 5 billion going, not to FB users I bet, how would they apportion it!?

The $5 billion, by law, goes to the general fund of the U.S. Treasury.

How will the US Treasury use this fund? Will it be distributed to the people of the US, who was directly impacted by Facebook's actions?

Thank You, I hope this is the start of a new era in protecting the user. Companies have a right to make a profit for the convenience they provide, but the unchecked amassing and sale of that data has been a disaster for the public. For a perspective, once upon a time, the bank issuance of credit cards was the wild west. It took a long time for the consumer protection features that we now enjoy to be implemented. I hope that stronger consumer protection features continue to be implemented.

THANK YOU FTC!!! Now if you could force them to let us remove ourselves from FB Messenger! It's impossible. And I'm glad the FCC is beginning to hold accountable the violators of our phone privacy with daily multiple Robocalls, etc. Maybe OUR government is finally listening to the people. Yay!

So after lawyer fees that boils down to what, $0.50 per user? They just made $17 billion in reported earnings ending June. Worth $518 billion. This is a drop in the bucket. Oh and stock price soars amidst all this news.

Fines should be paid to victims, and not end up in the Feds "general fund." Fines that end up in the Feds pocket, without any consideration of the victims, is merely a profit making scheme that is as bad as the scams that abuse consumers. Penalize Facebook. But provide compensation to victims.

It is sad that the government has to step in to make sure another business is not taking advantage of the human race. I am thankful of your emails letting me know whats going on. I work with many senior citizens and I pass on important information to them. Thank you, great job!

THANK YOU!!

Which is why I haven't used Facebook, Instagram, etc. in over 7 years. It's just not worth the stress of keeping track of these companies' privacy policies.

I do all that I can to protect my credit information! I'ts very frustrating to learn that the people who determine my credit worthiness, couldn't do there job....I am so happy that the FTC has
gone after them!!!!

The users better be getting paid kn this! I had to delete my old profile since my stalker could see me postvon mutual friends posts. I literally lost touch with 40 plus friends because i couldnt be their friend or the stalker would gind me. please update us about how to receive compensation.

It's about time. Glad they got caught but FB has been doing this for 15 years now. The damage is already done. All that money isn't going to remove our info they've already put out there is it? Can they put the toothpaste back in the tube? Might be great news for all the new to FB users...if there are any.

Curious why this hasn't made headlines.

Thank you FTC. About time!

They were to access my online activities and makes me to believe my privacy was compromised. I like, to ask the face book, to delete all live video and posts that were sent to the public with out my consent.

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