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Facebook Agrees to Pay $5 Billion Fine and Setup New Privacy Program for 20 Years

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The Federal Trade Commission (FTC) these days formally confirmed that Facebook has united to pay the best $5 billion fine over privacy violations encompassing the Cambridge Analytica scandal.

Besides the multibillion-dollar penalty, the corporate has conjointly accepted a 20-year-long agreement that enforces it to implement a replacement structure framework designed to strengthen its information privacy practices and policies.
The agreement needs Facebook to create some major structural changes, as explained below, that may hold the corporate answerable for the selections it makes concerning its users' privacy and knowledge it collects on them.
"The order needs Facebook to structure its approach to privacy from the company board-level down, and establishes sturdy new mechanisms to make sure that Facebook executives square measure answerable for choices|the choices|the selections} they create concerning privacy which those decisions square measure subject to pregnant oversight," the independent agency aforesaid in a very announcement.
According to the independent agency, Facebook has repeatedly used deceptive disclosures and settings to undermine its users' privacy preferences in violation of its 2012 independent agency order that needed social media to achieve express consent from users to share their personal information.

⏩ALSO READ: Email Hijacking

The newly proposed organizational framework will also cover not just Facebook's massive social media network, but also the company-owned services, including WhatsApp and Instagram.

"We've agreed to pay a historic fine, but even more important, we're going to make some major structural changes to how we build products and run this company," Facebook CEO Mark Zuckerberg said in a statement.

"As part of this settlement, we're bringing our privacy controls more in line with our financial controls under the Sarbanes-Oxley legislation. Our executives, including me, will have to certify that all of the work we oversee meets our privacy commitments."

"The reason I support them is that I believe they will reduce the number of mistakes we make and help us deliver stronger privacy protections for everyone."

Major changes will include:

1. Independent privacy committee — The company will be required to set-up an independent privacy committee of Facebook's board of directors who will be appointed by an independent nominating committee.

According to the FTC, this measure will create greater accountability at the board of directors level, removing unfettered control by Facebook's CEO Mark Zuckerberg over decisions affecting user privacy.

2. Compliance officers — The company will be required to appoint compliance officers who will work under the new independent privacy committee and whose job will be to monitor Facebook's entire privacy program. Facebook's CEO or its employees can not control, appoint, or remove the compliance officers.

It will be mandatory for compliance officers to submit compliance certificates every quarter as well as year to the FTC, ensuring that the company is running the privacy program as mandated by the order.


4. Privacy reviews — The order also enforces the company to conduct a thorough review of every new product or service that it develops. These reviews must be submitted to the company's CEO and a third-party assessor every quarter.5. Document security incident — Facebook will need to document any incident that compromises data of 500 or more users and its efforts to address such incidents. It is required to deliver this documentation to the FTC and the assessor within 30 days of the company's discovery of the incident.6. Strict rules for third-party apps — Following a year-long investigation, FTC finds that Facebook's poor privacy practices allowed the platform to share users' personal information with third-party apps without their explicit consent, and the company took inadequate steps to deal with any incident violating users' privacy.To fix this, the FTC has also asked Facebook to closely monitor third-party apps and how they use users' collected data, suggesting it to terminate any app developer account who fails to comply with its privacy policy or fails to justify their need for specific user data.

Besides these significant changes, the order also highlights some minor requirements, including:
Facebook cannot use telephone numbers for advertisements that users provide to activate security features like two-factor authentication on its platform.
Under the new rules, Facebook will also be required to obtain affirmative consent from its users prior to use facial recognition technology for any new feature.
Following the March 2019 incident where Facebook mistakenly stored plaintext passwords for hundreds of millions of its users and millions of Instagram users, FTC ordered Facebook to encrypt user passwords and regularly scan to detect if any passwords are stored in plaintext.

In April this year, Facebook was also caught asking some newly-registered users to provide the company with the passwords to their email accounts. So, the order now prohibits Facebook from asking for passwords to other services.

In a blog post published today, Facebook said it is building a new privacy program in compliance with the latest FTC requirements which will change the way Facebook handles its users' data and helpful in "rebuilding trust with people."

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