Social networking site Facebook Inc(NASDAQ:FB) faces
20 years of monitoring by the U.S. Federal Trade Commission to ensure that it
does not violate users' privacy and use the information that they have shared
on its website to get revenues without their specific consent.
The final approval to the settlement first announced
in November last year, was reached last week.
“We are pleased that the settlement, which was
announced last November, has received final approval," a spokesman for
Facebook told the Los Angeles Times.
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“The Order broadly prohibits Facebook from
misrepresenting in any manner, expressly or by implication, the extent to which
it maintains the privacy or security of any information it collects from or
about consumers,” a statement from the FTC said.
“For a company whose entire business model rests on
collecting, maintaining and sharing people’s information, this prohibition
touches on virtually every aspect of Facebook’s operations.”
The company was accused of deceiving subscribers and
users by telling them the information that they revealed on its site was
private but then it had made a lot of the information public without informing
them or even asking for their permission.
Under the terms of the agreement reached with the FTC,
the company has to give "clear and prominent notice" to its users and
obtain their express consent before sharing their personal information.
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The social network is liable to privacy audits by a
third party every two years and it would have to put in place systems and
checks to ensure that user privacy i not compromised.
Each time Facebook violated any of the terms under the
agreement it would have to pay a penalty of $16,000.
One member of the commission did not participate in
the final voting, while another member Commissioner J. Thomas Rosch gave a
dissenting vote. Rosch was sceptical of the extent to which the Facebook
environment would ensure user's privacy, especially when it came to downloading
third party applications.
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