Facebook to create privacy panel, pay $5bn to US to settle allegations

Facebook has been facing issues in data protection and privacy. (File/AFP)
Updated 24 July 2019

Facebook to create privacy panel, pay $5bn to US to settle allegations

  • As part of the settlement, Facebook will agree to create a board committee on privacy
  • It will also agree to new executive certifications that users’ privacy is being properly protected

WASHINGTON: The Federal Trade Commission is set to announce on Wednesday that Facebook Inc. has agreed to a sweeping settlement of significant allegations it mishandled user privacy and pay $5 billion, two people briefed on the matter said.
As part of the settlement, Facebook will agree to create a board committee on privacy and will agree to new executive certifications that users’ privacy is being properly protected, the people said.
Facebook Chief Executive Mark Zuckerberg will have to certify every three months that the company is properly safeguarding user privacy, a person briefed on the matter said.
The Washington Post reported on Tuesday that the FTC will allege Facebook misled users about its handling of their phone numbers and its use of two-factor authentication as part of a wide-ranging complaint that accompanies a settlement ending the government’s privacy probe, citing two people familiar with the matter.
Separately, the US Securities and Exchange Commission is expected to announce a related settlement with Facebook for around $100 million over allegations it failed to disclose risks to investors over its privacy practices. The Wall Street Journal reported the SEC settlement earlier.
The Post also reported the FTC also plans to allege Facebook provided insufficient information to about 30 million users about a facial recognition tool, an issue identified earlier by Consumer Reports.
The settlement comes amid growing concern among US policymakers about the privacy of online users and have sparked calls for new legal protections in Congress. Separately, the US Justice Department said late Tuesday it is launching a broad antitrust probe into the competitive practices of large tech companies like Facebook.
Two people briefed on the matter confirmed the Post report the FTC will not require Facebook to admit guilt as part of the settlement. The settlement will need to be approved by a federal judge and will contain other significant allegations of privacy lapses, the people said.
The fine will mark the largest civil penalty ever paid to the FTC.
The FTC and Facebook declined to comment.
The FTC confirmed in March 2018 it had opened an investigation into allegations Facebook inappropriately shared information belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica. The probe has focused on whether the data sharing violated a 2011 consent agreement between Facebook and the regulator and then widened to include other privacy allegations.
A person briefed on the matter said the phone number, facial recognition and two-factor authentication issues were not part of the initial Cambridge Analytica probe.
Some in Congress have criticized the reported $5 billion penalty, noting Facebook in 2018 had $55.8 billion in revenue and $22.1 billion in net income. Senator Marsha Blackburn, a Republican, said last week the fine should be $50 billion.
While the deal resolves a major regulatory headache for Facebook, the Silicon Valley firm still faces further potential antitrust probes as the FTC and Justice Department undertake a wide-ranging review of competition among the biggest US tech companies. Facebook is also facing public criticism from President Donald Trump and others about its planned cryptocurrency Libra over concerns about privacy and money laundering.
The Cambridge Analytica missteps, as well as anger over hate speech and misinformation on its platform, have prompted calls from people ranging from presidential candidate Senator Elizabeth Warren to a Facebook co-founder, Chris Hughes, for the government to force the social media giant to sell Instagram, which it bought in 2012, and WhatsApp, purchased in 2014.
But the company’s core business has proven resilient, as Facebook blew past earnings estimates in the past two quarters. Facebook is set to report earnings on Wednesday.


Instagram begins letting users report misinformation

Updated 15 August 2019

Instagram begins letting users report misinformation

  • Instagram will allow users tap a “report” option on-screen when they see a post they deem dubious

SAN FRANCISCO: Instagram on Thursday added a way for users to easily report deceptive posts at the photo and video-oriented social network owned by Facebook.
A new tool being rolled out out lets Instagram users tap a “report” option on-screen when they see a post they deem dubious, then tap a “false information” tag to prompt review by third-party fact-checkers, according to Facebook spokeswoman Stephanie Otway.
The option was expected to be available to all Instagram users by the end of this month.
Such prompts will be one of several “signals” used to determine whether content should be scrutinized by fact-checkers, who will determine their veracity.
“Starting today, people can let us know if they see posts on Instagram they believe may be false,” Otway said.
“We’re investing heavily in limiting the spread of misinformation across our apps, and we plan to share more updates in the coming months.”
The world’s biggest social network has been cracking down on fraudulent influence campaigns and bogus posts as pressure has mounted for online platforms to defend against efforts to manipulate online conversations.
User-reported Instagram posts found to be bogus but not in violation of the service’s policies will not be deleted, but won’t appear when users use “explore” or hashtag searches to discover content.
“Explore and hashtags allow people on Instagram to find content they haven’t already chosen to follow, and by filtering misinformation from these places, we can significantly limit its reach,” Otway said.
Feedback from the new tool will be used to train artificial intelligence software to scan for, and rate, fake posts without waiting for them to be reported, according to Facebook.