Facebook reaches agreement in privacy case with the FTC

By Lee Kaelin on

Facebook has settled its ongoing privacy dispute with the Federal Trade Commission after being charged with failing to keep promises it made regarding the privacy of its users, and for deceiving them. Resolving the dispute and agreeing acceptable terms is a major step forward as the company prepares for its estimated $100 billion initial public offering next April.

The FTC investigated multiple claims centering around the social network's privacy policies. The commission accused Facebook of systematically "invading" user privacy on seven specific counts. They specifically addresed Facebook's claims about its privacy policies that were "unfair, deceptive, and violated federal law."

Under the proposed aggrement, Facebook will have to obtain consent from users before making any changes to how their information is shared with other users or advertisers. This means users will have to opt-in to any new features or privacy settings before the changes can take place within their profile, which is in contrast to the current approach that requires them to proactively opt out from anything they are not comfortable with in the social networking site. The company will also be required to undergo an independent review of its privacy policies bi-annually for the next 20 years, the results of which will be inspected by the FTC.

"Facebook is obligated to keep the promises about privacy that it makes to its hundreds of millions of users," said Jon Leibowitz, chairman of the FTC. "Facebook's innovation does not have to come at the expense of consumer privacy. The FTC action will ensure it will not."

In a blog post published yesterday, Facebook founder Mark Zuckerberg gave his thoughts on his commitment to the Facebook community: "Overall, I think we have a good history of providing transparency and control over who can see your information. That said I'm the first to admit that we've made a bunch of mistakes."

He further commented, "In particular, I think that a small number of high profile mistakes, like Beacon four years ago and poor execution as we transitioned our privacy model two years ago, have often overshadowed much of the good work we've done [...] Privacy principles are written very deeply into our code. Even before the agreement announced by the FTC today, Facebook had already proactively addressed many of the concerns the FTC raised."

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