FB Pays US$5 billion and the US Government and Xie Xiaozao Lose Decision-making Power in Privacy Field

 FB Pays US$5 billion and the US Government and Xie Xiaozao Lose Decision-making Power in Privacy Field

Peng Mei News Reporter Cheng Tianmeng Comprehensive Report

The US governments huge fines for Facebook have officially landed.

On July 23, Facebook and the Federal Trade Commission (FTC) officially announced a settlement of $5 billion, ending an investigation into a series of privacy leaks such as the Cambridge scandal.

This is the largest fine ever imposed by the Federal Trade Commission. The settlement agreement ended Facebook CEO Mark Zuckerbergs decision-making power in the privacy field for the first time, and set up an independent privacy Committee on the companys board of directors.

According to the technology website TheVerge on the same day, in the settlement agreement, the Federal Trade Commission said that Facebook violated the law by failing to protect data from third-party theft; advertising through phone numbers obtained on security grounds; and deceiving users that their facial recognition software was closed by default. To settle the charges, Facebook will pay a $5 billion fine and agree to impose a series of new restrictions on its business.

In addition to a $5 billion fine, Facebook needs to conduct a privacy review of every new product and service it develops, submitting quarterly results to the CEO and a third party for evaluation. Part directly related to the Cambridge analysis case includes that third-party applications and developers who want to use Facebooks user information must submit their data use purposes and licenses to the platform. However, once the data is disclosed to third-party companies, how they use the data is no longer restricted.

Facebooks facial recognition software has also been criticized. The new rules require Facebook to obtain explicit user approval before it can create a new face recognition model. However, the rules do not require the destruction of the old models that the company had previously created without explicit consent.

The settlement was voted through by the Federal Trade Commission (FTC) 3-2, supported by three Republican members and opposed by two Democratic members.

This reconciliation order applies a privacy system, including a new corporate governance framework, accountability to companies and individuals, and stricter compliance oversight, the three Republican members who supported the reconciliation said in a statement. This approach greatly increases the likelihood that Facebook will comply with the reconciliation order in case of deviation. It will be quickly discovered and corrected.

Two Democratic Party members, Rebecca Kelly Slaughter and Rohit Chopra, opposed the settlement.

When a company violates the law, as long as it pays a huge fine, it can keep the business model intact and continue to make profits, which can not be said to be a victory for law enforcement agencies. Chopra said in a statement. He also said that the settlement agreement did not give the board the right to represent users rather than shareholders in terms of privacy, while leaving company executives not responsible for potential misconduct.

Slaughter said that in view of Facebooks repeated violations, the Federal Trade Commission should change Facebooks behavior by suing companies and their CEOs.

Facebook responded to the settlement by posting a blog post that morning.

This agreement calls for a fundamental shift in our working methods and an increase in the responsibilities of employees who build products at every level of the company, Facebook said. It marks a dramatic shift in privacy, not on the scale of everything we have done in the past.

Bloomberg reported that the settlement was approved, but had little effect on changing Facebooks structured data collection practices, which were at the heart of Facebooks business model. Although the $5 billion fine is already very severe, Facebooks sales in 2018 were close to $56 billion, and the company set aside $3 billion for the fine.

Source of this article: Peng Mei News Responsible Editor: Yao Liwei_NT6056