Facebook Settles Privacy Complaint With FTC

Site admits mistakes, but vows transparency

Facebook can no longer get away with playing fast and loose with its users' privacy. The Federal Trade Commission will see to it.

The FTC announced Tuesday that Facebook—admitting that it had deceived consumers about what information about them was private and what was shared—has agreed to settle an eight-count complaint from the FTC, which found that the social network's privacy policy violated federal law prohibiting unfair and deceptive business practices.

Facebook has been the darling of drooling venture capitalists who anticipate the company's lucrative IPO, but the site has also become a favorite target of privacy advocates, who believe the social network has been one of the Internet's worst offenders when it comes to its privacy policies, or lack of them.

The settlement allows Facebook to move on, FTC Chairman Jon Leibowitz said in a conference call with reporters. "Facebook's innovation does not have to come at the expense of consumers' privacy," he said.

For the next 20 years, the FTC will be looking over the social network's shoulder via third party audits, making sure consumers have control over their personal information. Any violation would be met with a $16,000 fine per violation per day.

"On numerous occasions, Facebook violated privacy commitments to consumers. That should never happen again," said FTC chairman Jon Leibowitz.

Considered along with the agency's comparable privacy settlement in March with Google over the launch of Google Buzz, the FTC's message is clear. "Companies must live up to their promises about privacy," said Leibowitz. "We'll use every tool at our disposal to make sure companies treat consumers' privacy with care and respect."

The FTC's eight-count complaint dates back to December 2009, when Facebook changed privacy settings and allowed certain information that users had designated as private to be made public. At the time, Facebook failed to warn users about the change or get advance approval for sharing the information. The site also played fast and loose with personal information, which was shared with advertisers and third party apps.

"When a user clicked on an ad on a Facebook website, it enabled advertisers to get detailed information about users," said Leibowitz.

In a blog post, Facebook founder and chief executive Mark Zuckerberg said that over the years the company had made "a bunch of mistakes," but he also committed to "making Facebook the leader in transparency and control around privacy."

"These agreements create a framework for how companies should approach privacy in the United States and around the world. For Facebook, this means we're making a clear and formal long-term commitment to do the things we've always tried to do and planned to keep doing – giving you tools to control who can see your information and then making sure only those people you intend can see it," Zuckerberg wrote.  

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