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Facebook Privacy Case With FTC Settled

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facebookFacebook as a part of federal charges settlement will have to get user consent first or the user will have to opt in to the new privacy settings.

Facebook will also be subjected to 20 years of independent audits following the settlement with the United States Federal Trade Commission, as it prepares to follow in the footsteps of Groupon (NASDAQ:GRPN) and Linkedin Corp. (NYSE:LNKD), for a $10 billion initial public offering by next year. Facebook has planned to go public and will be filling with the SEC before March 30th next year.

Mark Zuckerberg, Facebook’s co-founder, in a lengthy post on the networks own blog wrote that he is the first one to admit that Facebook has made a bunch of mistakes. Zuckerberg said, a few high profile mistakes like changes to the network’s privacy policy in 2009, have dwarfed much of the other good work that Facebook. The mistakes were made in order to push members to share more personal details than intended.


In order to ensure that Facebook did a better job the company has made two fresh corporate privacy officer positions to supervise Facebook policy and products, said Zuckerberg. FTC in its complaint said, the network had recurrently violated laws against unfair and deceptive practices. For instance, Facebook assured that member’s personal information will not be shared with advertisers, however it did not follow this and shared with third parties all the information stored with it.

In another instance Facebook had also failed to caution users that in December 2009 that it was revamping its website and certain information which is designated by the user as private like the Friends List would be made Public, Federal Trade Commission said.

Facebook, the world largest social network that currently boasts more than 800 million users, has repeatedly been criticized since its founding in 2004 at a Harvard dorm room over privacy practices. Facebook earlier this year came under limelight for practices linked to use of facial recognition technology to automatically identify users appearing in the photos that are shared over the network.

An FTC official, over a conference call on Tuesday with reporters, said that the settlement did not cover the use of the facial recognition technology. However, they noted that the technology was widely crafted so it would avoid Facebook from deceiving members onward.

Jon Leibowitz, chairman of the Federal Trade Commission, said that if in future Facebook is found to be violating any of the settlement provisions then the network is subjected to a fine of $16,000 each day for every violation. Nothing will prevent Facebook from innovating, however, Facebook’s innovation does not have to come at the cost of user privacy, he added.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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