FTC Imposes Record $5 Billion Fine Against Facebook

In a press release, the Federal Trade Commission (FTC) announced that Facebook, Inc. will pay a record-breaking $5 billion penalty, and submit to new restrictions and a modified corporate structure that will hold the company accountable for the decisions it makes about its users’ privacy, to settle Federal Trade Commission charges that the company violated a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information. The $5 billion penalty against Facebook is the largest ever imposed on any company for violating consumers’ privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide.  It is one of the largest penalties ever assessed by the U.S. government for any violation.

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” said FTC Chairman Joe Simons.  “The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC.  The relief is designed not only to punish future violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.  The Commission takes consumer privacy seriously, and will enforce FTC orders to the fullest extent of the law.”

_______________________________________________________________________________________________

The Regulatory Mix Today: FTC Imposes Record $5 Billion Fine Against Facebook, FCC Urban Rate Surveys, FTC Sues Cambridge Analytica

_____________________________________________________________________________________________

FCC Urban Rate Surveys to be Sent Tomorrow

The FCC announced the initiation of the urban rate survey for 2020.  Notifications that a provider is required to complete a survey will be sent via email to each selected provider’s FCC Form 477 contact person and certifying official on Thursday, July 25, 2019. The survey consists of an online reporting form which will be accessible only to the selected providers.  The email notification will provide detailed information on how to access and complete the survey online report form and how to obtain technical assistance. Completed surveys will be due on Monday, August 26, 2019.

The information will be used to develop voice and broadband reasonable comparability benchmarks that will be in place in 2020.  To obtain this year’s samples, the FCC will be collecting the rates offered by a random sample of providers of fixed services identified using December 2018 FCC Form 477 data.  Separate samples will be collected for fixed voice and fixed broadband services with up to 500 urban Census tracts in each.  Because some providers serve many urban Census tracts, these providers may receive surveys for multiple Census tracts.

FTC Sues Cambridge Analytica

The FTC announced that they have filed an administrative complaint against data analytics company Cambridge Analytica, and filed settlements for public comment with Cambridge Analytica’s former chief executive and an app developer who worked with the company, alleging they employed deceptive tactics to harvest personal information from tens of millions of Facebook users for voter profiling and targeting.

As part of a proposed settlement with the FTC, two of the defendants—app developer Aleksandr Kogan and former Cambridge Analytica CEO Alexander Nix—have agreed to administrative orders restricting how they conduct any business in the future, and requiring them to delete or destroy any personal information they collected. Cambridge Analytica has filed for bankruptcy and has not settled the FTC’s allegations.

The FTC alleges that Cambridge Analytica, Nix, and Kogan deceived consumers by falsely claiming they did not collect any personally identifiable information from Facebook users who were asked to answer survey questions and share some of their Facebook profile data.  The FTC separately announced that Facebook will pay a record-breaking $5 billion penalty and submit to new restrictions that will hold the company accountable for the decisions it makes about its users’ privacy as part of a settlement resolving allegations that the company violated a 2012 FTC privacy order.

____________________________

The Regulatory Mix, Inteserra’s blog of telecom related regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of an Inteserra Briefing.