Facebook to pay $5 billion fine to US for ‘mishandling’ user privacy
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 U.S. 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 U.S. policymakers about the privacy of online users and have sparked calls for new legal protections in Congress. Separately, the U.S. Justice Department said late Tuesday it is launching a broad antitrust probe into the competitive practices of large tech companies like Facebook.