Facebook hit with biggest fine in FTC history for privacy violations

The Federal Trade Commission (FTC) just levied the largest fine in tech history to Facebook, to the tune of $5 billion. The fine was for using "deceptive disclosures and settings" that went against a privacy agreement Facebook made with the FTC in 2012. The FTC also said that Facebook used phone numbers that they obtained for security reasons to target users with advertisements.

"The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC," said Chairman Joseph Simons in a statement. "The relief is designed not only to punish future violations but, more importantly, to change Facebook's entire privacy culture to decrease the likelihood of continued violations."

Mark Zuckerberg, the CEO of Facebook, released a statement on Facebook soon after the FTC's announcement that suggests they may be taking the fine to heart.

"As part of this settlement, we're bringing our privacy controls more in line with our financial controls under the Sarbanes-Oxley legislation," Zuckerberg wrote on his own Facebook wall. "Our executives, including me, will have to certify that all of the work we oversee meets our privacy commitments. Just as we have an audit committee of our board to oversee our financial controls, we'll set up a new privacy committee of our board that will oversee our privacy program. We've also asked one of our most experienced product leaders to take on the role of Chief Privacy Officer for Products."

Zuckerberg also connected the fine with Facebook's announcement earlier this year that they're working to overhaul their privacy policies and protections moving forward.

However, the power of the fine as a deterrent for Facebook or other tech companies is questionable. While $5 billion is an enormous amount of money - and the biggest fine in FTC history - the company will be able to pay it back in 27 days, according to The Guardian.

A consequence that may have a little more teeth for a company that has so much money is the requirements that were also included in the fine. Facebook will be required to create a privacy oversight committee that can't be fired solely by Zuckerberg. They'll have to appoint other officers who will be tasked with reporting to the FTC whether or not Facebook is complying with the agreement. If they don't - or if they file false reports - they will be held personally liable.

"False certifications would subject Mr. Zuckerberg and the [designated compliance officers] to personal liability, including civil and criminal penalties," Simons wrote.

This fine is the latest in a series of steps the federal government has been taking to rein in the tech industry, which grew largely on the backs of user privacy. And while Facebook's promises to change are a step in the right direction, it's hard not to be skeptical that it's going to be too little, too late.

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