On Wednesday, the Federal Trade Commission (FTC) announced a $5 billion penalty against Facebook regarding its user privacy lapses. It was the biggest privacy fine in history and came with several restrictive requirements against the social network. As a consequence, Facebook is shuttering its data sharing partnerships with Sony and Microsoft.
CEO Mark Zuckerberg confirmed the settlement with the FTC serves as a point for Facebook to restructure. Requirements placed on the company change how it can handle user's data.
In its response to the penalties, Facebook said that it has already been winding down data integrations. However, the social network claims a software bug meant a dozen partners could still access data. Among them, Microsoft and Sony were the only two that “continued to access limited types of friends data”.
The company says data used was in direct violation of its policies, but admits the fault was not on the third parties.
“This was our mistake, and we are correcting it,” Ime Archibong, vice president of product partnerships, said in a Facebook blog post. “We will be operating under a comprehensive new framework for protecting people's privacy and the information they give us. The order requires a fundamental shift in the way we work.”
Microsoft responded to the situation by saying it has “respected all user preferences” while working with Facebook. This suggests Microsoft only used data from users who gave permission to share their information.
Alongside the FTC $5 billion penalty, Facebook now has more stringent requirements placed on it. Among them is the removal of telephone numbers as a method of security and providing users with clear notice when facial recognition technology is to be used. Furthermore, the social network must now create a data security program.
Executives will also face repercussions for privacy decisions after the FTC criticized the ability of Facebook execs to avoid punishment.
All new requirements are also placed on Facebook-owned companies, which means services such as WhatsApp and Instagram.
Discussing the penalty, the FTC said the requirements will push Facebook to change how it operates:
“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers' choices,” said FTC Chairman Joe Simons in the press release. “The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC. The relief is designed not only to punish future violations but, more importantly, to change Facebook's entire privacy culture to decrease the likelihood of continued violations. The Commission takes consumer privacy seriously and will enforce FTC orders to the fullest extent of the law.”