The US Federal Trade Commission also required the company to establish an independent privacy committee.
Background: The FTC started an investigation into Facebook’s privacy practices in March 2018. This was not only related to the Cambridge Analytica scandal, but more broadly to the possible violation of a privacy settlement between the FTC and the company, reached in 2011, in many of the aspects related to the company’s handling of personal data.
The new ruling: The FTC has now issued a ruling that concludes the investigation, issuing a fine of unprecedented size ($5bn). This is about a third of the company’s revenues in Q1 2019 ($16bn). The new settlement will also involve the creation of a board committee on privacy, whose members cannot be fired by Zuckerberg alone; the committee will also have the exclusive power to remove any privacy compliance officer the company will designate. Facebook will also have to submit quarterly certifications of compliance with the privacy program mandated by the FTC’s order.
More to come from the FTC: Despite the fine, the FTC is not yet finished with Facebook. In June, the FTC started an antitrust investigation against the company, the consequences of which are currently unclear. Facebook confirmed it is aware of the investigation in the latest quarterly earnings call, which took place this week.
