By Ryan Tracy in Washington and Emily Glazer in Los Angeles
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 11, 2020).
Almost six months after Facebook Inc. agreed to a $5 billion
settlement of privacy violations, the issue is anything but settled
for the social-media giant.
The deal with the Federal Trade Commission announced in July to
settle allegations that Facebook broke its promises to protect
users' privacy is still under review by a federal judge, who has
been weighing objections from opponents who believe the deal is
Judge Timothy Kelly of the U.S. District Court for the District
of Columbia has ordered Facebook and the government to file by Jan.
24 written responses to privacy advocacy groups critical of the
The groups' chief complaint is a provision releasing Facebook
from liability for past missteps, including any unfair or deceptive
actions the FTC was aware of as of June 2019. That provision, they
say, could nullify long-held complaints about Facebook that aren't
addressed in the proposed settlement, including about its use of
facial-recognition technology or its collection of personal health
"The proposed release is so vague, and the scope of immunity
Facebook would gain is so indeterminately broad, that the Court
should reject it as procedurally unfair," Marc Rotenberg, president
of the Electronic Privacy Information Center, said in a filing to
Facebook and the FTC have defended the record penalty and
related requirements for the company, saying it will reshape how
the company considers users' privacy. The settlement is based on
charges that Facebook violated a 2012 FTC order by deceiving users
about their ability to control their personal information.
James Kohm, director of enforcement in the FTC's consumer
protection bureau, said the agency was aware of other privacy
complaints about Facebook, and the settlement addresses violations
"that we determined were actionable."
He said in an interview that he expects the court to approve the
Facebook said it has been taking the necessary steps to
implement the agreement. "We've put dozens of teams in place, made
many of the necessary structural and technical changes and expanded
privacy protections across our products," said Michel Protti, chief
privacy officer of product.
Still, Facebook isn't concerned the deal with the FTC will fall
apart, people familiar with the matter said.
Inside the social-media company, senior officials have been
putting in an increasing amount of money, people and time to comply
with requirements of the FTC deal, the people said.
At a Facebook off-site gathering for senior officials in Hawaii
last month, compliance with the FTC settlement was one of the focus
areas, some of the people said.
The settlement requires Facebook to restructure its privacy
practices from the board of directors down. That includes an
independent board privacy committee, mandatory privacy reports to
senior leaders and personal certification from Chief Executive Mark
Zuckerberg that Facebook is complying with regulatory requirements.
The company also must hire an independent assessor that will report
to the board's privacy committee. Some aspects legally can't be
activated until after the court gives final approval, Facebook
There are additionally a number of privacy requirements that
have taken longer than expected to implement given the number and
complexity of Facebook's databases and servers, the people familiar
Company officials in Hawaii also heard updates about other
potential headaches, one of the people said, including
investigations by state attorneys general. The states are probing,
among other things, what Facebook knew about the activities of
Cambridge Analytica, a former political consulting firm that used
harvested Facebook user data.
Dozens of states in 2018 wrote a joint letter asking Facebook
for information about its privacy practices in the wake of reports
about Cambridge Analytica. State investigations are continuing,
with New York and Pennsylvania among the most aggressive, according
to the person.
Facebook said it is cooperating with the probes.
Mr. Zuckerberg, at the time of the settlement announcement, said
the new requirements "go beyond anything required under U.S. law
today. The reason I support them is that I believe they will reduce
the number of mistakes we make and help us deliver stronger privacy
protections for everyone."
Facebook has also resisted some states' requests. Attorneys
general representing California, Massachusetts and the District of
Columbia have each taken Facebook to court demanding access to
internal company documents. In California's case, the state is
subpoenaing emails from senior executives.
"Now that the court has compelled Facebook to respond I think
they will be more diligent in producing information," California
Attorney General Xavier Becerra said in an interview last
The FTC's investigation unearthed email exchanges appearing to
connect Facebook's Mr. Zuckerberg to potentially problematic
privacy practices, The Wall Street Journal reported in June. When
the FTC announced the settlement in July, it didn't disclose emails
from Mr. Zuckerberg or other executives. Facebook at the time said
it fully cooperated with the FTC's investigation and provided tens
of thousands of documents, emails and files. The company then said
Mr. Zuckerberg or others didn't knowingly violate Facebook's
obligations under the FTC consent order nor do any emails exist
that indicate they did.
Mr. Kohm of the FTC said evidence his agency gathered suggested
"this was a company that wasn't paying attention to privacy the way
they should, and part of that is reflected in the fact that the CEO
wasn't as involved" in privacy decisions.
Others at the FTC have said the agency should have pressed
further to investigate the role of senior Facebook executives. FTC
Commissioner Rohit Chopra, one of the agency's commissioners who
voted against approving the Facebook settlement, last month told a
gathering of state attorneys general, "There was a lot more to do,
and I think that now the ball really is in your court."
Write to Ryan Tracy at firstname.lastname@example.org and Emily Glazer at
(END) Dow Jones Newswires
January 11, 2020 02:47 ET (07:47 GMT)
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