Facebook Settlement Requires Mark Zuckerberg to Certify Privacy Protections -- 2nd Update
July 23 2019 - 8:49PM
Dow Jones News
By Ryan Tracy and John D. McKinnon
WASHINGTON -- Facebook Inc. CEO Mark Zuckerberg will have to
personally certify that the company is taking steps to protect
consumer privacy under a settlement expected to be announced with
the Federal Trade Commission Wednesday, a person familiar with the
matter said.
The deal includes a requirement that Mr. Zuckerberg make the
certification to the FTC quarterly based on his personal knowledge,
the person said. A false statement in such a certification would be
subject to potential penalties, this person said.
Another person familiar with the matter said Mr. Zuckerberg will
have to certify that Facebook has privacy controls in place.
The Wall Street Journal has previously reported that the
settlement includes a roughly $5 billion fine for Facebook and
other requirements around how Facebook treats users' privacy.
Facebook doesn't admit or deny guilt for previous privacy
missteps as part of the deal, according to people familiar with the
matter.
The settlement will conclude an FTC probe into whether Facebook
violated the terms of a previous FTC order, announced in 2011, in
which the company promised to protect consumers' information and be
transparent about how it uses personal data.
A number of missteps in recent years have raised questions about
Facebook's compliance with the previous settlement, most notably
the disclosure last year that tens of millions of Facebook users'
data had made its way into the hands of Cambridge Analytica, a
political consulting firm that worked for President Trump's
campaign.
The treatment of Mr. Zuckerberg has been a crucial issue for
both the FTC and Facebook during negotiations, and the outcome
could be viewed as a win by both sides. Facebook avoids liability
for Mr. Zuckerberg based on previous alleged misdeeds, and avoids a
lengthy trial were the case to end up in court.
Mr. Zuckerberg wasn't personally interviewed by the FTC as part
of its probe, a person familiar with the matter said
For the FTC, particularly the agency's Republican leadership,
the forward-looking requirements on Mr. Zuckerberg represent a way
to show they are holding the powerful CEO personally
accountable.
As some details of the deal were divulged in recent weeks, the
FTC has faced criticism largely focused on the fact that a monetary
fine, however large, wouldn't be enough to deter the profitable
social media giant from future privacy violations.
The settlement was approved recently by the FTC's five-member
board by a 3-2 vote, people familiar with the matter have said,
with three Republicans voting in favor and two Democrats
dissenting.
The company is also expected to create a new board committee
focused on privacy, to help bolster senior-level scrutiny of the
issue at the firm.
Even with the provisions regarding Mr. Zuckerberg, the deal may
not satisfy Facebook's loudest critics, who are urging regulators
to take more intrusive steps such as curtailing Facebook's data
collection or breaking up the company.
While Facebook has become the chief target for critics, other
big companies also have been drawn into the privacy crossfire.
Just this week, the FTC took action against Equifax Inc. over a
massive data breach affecting tens of millions of Americans. The
agency's settlement extracted a civil penalty of up to $700 million
from the company.
The FTC is expected soon to settle another high-profile case
against Alphabet Inc. unit YouTube over alleged violations of
children's online privacy rights.
Taken together, the recent cases suggest that the agency plans
to strengthen its much-maligned enforcement efforts in online
privacy cases, in hopes of staving off critics who have called for
a new federal privacy agency.
Federal antitrust enforcement agencies including the FTC and the
Justice Department also have begun preparing for antitrust
investigations involving big tech, likely starting with Google as
well as Facebook. Lawmakers and some presidential candidates also
appear increasingly interested in taking aggressive new tacks on
potential antitrust violations by the big tech firms.
The FTC's Facebook settlement -- which already has been widely
panned by privacy advocates -- could further fuel the calls for
greater antitrust scrutiny of big tech.
Already, the Electronic Privacy Information Center, an advocacy
group whose earlier complaints helped lead to a 2011 FTC privacy
enforcement order against Facebook, has said the FTC should break
up the company by forcing it to unwind its acquisitions of
Instagram and WhatsApp.
Write to Ryan Tracy at ryan.tracy@wsj.com and John D. McKinnon
at john.mckinnon@wsj.com
(END) Dow Jones Newswires
July 23, 2019 20:34 ET (00:34 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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