Monday, August 13, 2012

Facebook Inc (NASDAQ:FB) Subject to 20-years Monitoring by FTC

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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