US Federal Trade Commission fines Facebook $5 billion for its privacy practices

The United States Federal Trade Commission on Wednesday fined social media giant Facebook a record $5 billion (Rs 34,484 crore to resolve a government investigation into its privacy practices, Reuters reported. The US FTC said the social media firm must restructure its approach to privacy.

“Despite repeated promises to its billions of users worldwide that they could control how personal information is shared Facebook undermined consumers’ choices,” said FTC Chairperson and Republican leader Joe Simons. The FTC voted 3-2 to fine Facebook.

The commission alleged that Facebook’s data policy was deceve to “tens of millions” of people who used its facial recognition tool. Under the settlement, Facebook’s board of directors will create an independent privacy committee that will remove “unfettered control by Facebook CEO Mark Zuckerberg over decisions affecting user privacy,” the FTC said. The social media company also agreed to monitor third-party apps more than before.

The company will have to provide quarterly certifications attesting to its privacy practices. Under the settlement, Facebook is barred from asking for email passwords to other services when consumers sign up.

However, Democratic FTC Commissioners Rohit Chopra and Rebecca Slaughter, who opposed the penalty, said the fine might be less than what Facebook gains from violating user privacy. “Until we address Facebook’s core financial incentives for risking our personal privacy and national security, we will not be able to prevent these problems from happening again,” Chopra said.

However, the Republican commissioners, led by Simons, argued that the fine was much higher than what any federal court would have done. The Republican majority argued that the fine “significantly diminishes Mr Zuckerberg’s power – something no government agency, anywhere in the world, has thus far accomplished”.