"Mr. President, Obama, Sir. You don't suppose you could lift that 20-year probation the FTC just slapped on Facebook. I got you elected, dude."
(Reuters) - Facebook will be required to get user consent for certain changes to privacy settings as part of a settlement of federal charges that it deceived consumers and forced them to share more personal information than they intended.
The settlement with the U.S. Federal Trade Commission will also subject the company, which is reported to preparing a $10 billion initial public offering, to 20 years of independent audits.
Co-founder Mark Zuckerberg wrote in a lengthy post on the company's official blog on Tuesday.
"I'm the first to admit that we've made a bunch of mistakes."
To ensure that Facebook did a better job, Zuckerberg said the company had created two new corporate privacy officer positions to oversee Facebook products and policy.
In its complaint, the FTC said that Facebook had repeatedly violated laws against deceptive and unfair practices. For example, it said Facebook promised users that it would not share personal information with advertisers, but it did.
Also, the company had failed to warn users that it was changing its website in December 2009 so that certain information that users had designated as private, such as their "Friends List," would be made public, the FTC said.
Chris Conley, policy attorney with the American Civil Liberties Union of Northern California said
"The settlement makes it clear that companies can't simply change the rules without asking users' permission."
But he said that to keep pace with new technology, there was a need for new laws and tools.
"We shouldn't have to struggle with complicated and constantly shifting privacy settings just to keep control of our own personal information."
Facebook, which has more than 800 million users, has often been criticized for its privacy practices since its founding in a Harvard dorm room in 2004.
Earlier this year, the company came under fire for practices related to its use of facial recognition technology to automatically identify people appearing in the photos that are shared on the service.
ABILITY TO INNOVATE
On a conference call with reporters on Tuesday, FTC officials said the settlement did not expressly cover the use of facial recognition technology.
They noted, however, that it was broadly crafted so that it would prevent Facebook from deceiving consumers going forward.
If Facebook is found to have violated any of the provisions of the settlement, the company is subject to fines of $16,000 per day for each violation, FTC Chairman Jon Leibowitz said.
"Nothing in this order will restrict Facebook's ability to innovate. Facebook's innovation does not have to come at the expense of consumer privacy."
Under the settlement, which must be approved by an FTC administrative law judge, Facebook is barred from being deceptive about how it uses personal information, and is required to get permission before changing the visibility of the personal information users have posted.
The settlement follows a similar agreement in March between the FTC and Google Inc over the Web search leader's rollout of its own social network called Buzz.
In 2010, the FTC settled charges with Twitter and Google, after the agency alleged that the social networking service had failed to safeguard users' personal information.
Ray Valdes, an analyst at industry research firm Gartner, said he did not think the timing of the settlement was directly related to Facebook's IPO plans.
he said, but added:
"I don't think it's directly tied to the IPO. The IPO is still off in the distance. There's some connection. I'd make more of a direct link if this was happening in January."
COMMENTARY: In a blog article dated November 11, 2011, I alerted you to the coming settlement between Facebook and the FTC. I am glad to finally see this happen, and that the FTC didn't back down.
Zuck has been very cavaliar about user privacy, thinking he can get away with just about anything. It seems everytime Facebook makes a new change, users need to provide more information about themselves. That's been the pattern.
Social game providers like Zynga have also committed some atrocious privacy violations, sharing information they collected from their gameplayers, and supplying it to their advertisers, and perhaps even to Facebook.
The whole social networking ecosystem is rampant with privacy violatioins. Smartphones are being used to track us, and hundreds of apps have been found to capture information, including our photos, names, addresses and even phone numbers, and using that information without the users consent.
I love the fact that there is a sizable fine of $16,000 for every new violation per day. Same thing goes for Google and Twitter.
Join the privacy violator club Zuck.
Courtesy of an article dated November 29, 2011 appearing in Reuters