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FTC Fines Facebook $5 Billion for Privacy Violations

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  • The Federal Trade Commission has fined Facebook $5 billion for violating the privacy of customers and imposed new accountability measures and restrictions for Facebook, WhatsApp, and Instagram.
  • The fine is the largest penalty imposed on a tech company for privacy violations ever, which comes after a yearlong investigation into Facebook’s involvement in the Cambridge Analytica data breach.
  • The FTC found that Facebook “deceived” their customers by allowing their data to be accessed by apps their friends used, despite telling the public they had stopped that practice.
  • The FTC also alleges that Facebook enforced data sharing policies based “on whether Facebook benefited financially from its arrangements with the developer.”

FTC Announcement 

The U.S. Federal Trade Commission (FTC) announced Wednesday that it was fining Facebook a record-breaking $5 billion for privacy violations as well as instituting sweeping privacy restrictions and oversight measures.

The penalty represents the largest fine that the FTC has ever imposed on a tech company by far. It is also the biggest penalty ever brought on a company for privacy violations, according to the FTC announcement.

The announcement comes after a yearlong investigation of Facebook over privacy violations.

That investigation was started right after The New York Times and The Observer of London reported that Facebook allowed British political consulting firm Cambridge Analytica to harvest the data of millions of Facebook users without their knowledge and build voter profiles from those users data without their consent.

Cambridge Analytica got the data from Facebook users who used a third-party gaming application called “This Is Your Digital Life.”

Although it has been estimated that only around 270,000 people used the app, the users who gave the app permission to access and acquire their data also gave the app permission to do the same for all of their Facebook friends.

That resulted in the personal information of nearly 87 million Facebook users being collected by Cambridge Analytica, despite the fact that the vast majority of those people had never given the firm permission to access their information, or even played the game.

Along with investigating Cambridge Analytica, the FTC’s investigation also expanded to look at other privacy concerns, such as the tech giant’s data-sharing policies with other third-party apps and device-makers that Facebook users might not have understood or been aware of.

FTC Findings

All of that culminated in the report and announcement released Wednesday by the FTC.

In addition to the $5 billion fine, the FTC’s announcement also stated that Facebook must “submit to new restrictions and a modified corporate structure that will hold the company accountable for the decisions it makes about its users’ privacy.”

That requirement, the FTC says, is mandated “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 FTC goes on to describe the 2012 order in question, saying that it explicitly “prohibited Facebook from making misrepresentations about the privacy or security of consumers’ personal information, and the extent to which it shares personal information.” 

The 2012 FTC order also required that Facebook “maintain a reasonable privacy program that safeguards the privacy and confidentiality of user information.”

Violations of 2012 Order

The FTC goes on to outline how Facebook specifically violated the 2012 order. The statement describes numerous instances, but the most significant examples center around privacy disclosures to customers.

For example, in 2012, Facebook put a disclosure on their Privacy Settings page telling users the information they shared with their friends could also be shared with the third-party apps their friends used. 

The FTC claims that four months later, Facebook removed the disclosure “even though it was still sharing data from an app user’s Facebook friends with third-party developers.”

Then in 2014, Facebook announced they would stop letting third-party developers collect data about the friends of app users. However, the FTC says that Facebook separately told the developers that they could continue to access that data until April 2015.

Even then, Facebook still waited “until at least June 2018 to stop sharing user information with third-party apps used by their Facebook friends,” the FTC said.

The statement then goes on to say, “Facebook did not screen the developers or their apps before granting them access to vast amounts of user data.” 

Facebook also claimed it had consequences for policy violations by third-parties, but it “did not enforce such policies consistently and often based enforcement of its policies on whether Facebook benefited financially from its arrangements with the developer,” the FTC alleged.

New Restrictions & Overhauls

In addition to spelling out Facebook’s privacy violations, the FTC announcement also included some of the new restrictions and oversight measures that Facebook will have to comply with under the settlement.

To ensure accountability with Facebook’s board of directors, the order will create “an independent privacy committee of Facebook’s board of directors,” in order to remove “unfettered control by Facebook’s CEO Mark Zuckerberg over decisions affecting user privacy.”

The settlement also requires the company to “designate compliance officers who will be responsible for Facebook’s privacy program,” and gives a third-party assessor more power to evaluate Facebook’s privacy programs.

Regarding restrictions the settlement imposes, Facebook will now have to conduct privacy reviews for any new or modified products and services before they can be implemented.

It will also be required to document any data breach involving 500 or more users. 

The FTC statement continues to include a laundry list of new requirements, like exercising more oversight over third-party apps, encrypting passwords, and more.

Notably, it also requires Facebook to “establish, implement, and maintain a comprehensive data security program.”

Also of huge significance is that these new restrictions and accountability measures will also apply to Facebook-owned companies WhatsApp and Instagram.

Response

The decision was approved by the FTC’s commissioners in a 3-to-2 vote earlier this month, with the three Republican commissioners voting to approve the settlement and the two Democrat commissioners voting to oppose.

In a statement to The New York Times, the three Republican commissioners, including agency chairman, Joseph Simons, said the settlement “will provide significant deterrence not just to Facebook, but to every other company that collects or uses consumer data.”

However, the two Democratic commissioners argued that the settlement did not do enough. They said that the $5 billion fine is just a slap on the wrist for Facebook, which made $55.8 billion in revenues last year alone. 

They also pointed out that the settlement did not actually do anything to change or restrict Facebook’s ability to collect and share their user’s personal information.

“The proposed settlement does little to change the business model or practices that led to the recidivism,” Democratic Commissioner Rohit Chopra wrote in his dissenting statement. “Nor does it include any restrictions on the company’s mass surveillance or advertising tactics.”

The Democratic commissioners also reportedly disliked the settlement because they wanted to take the case to court, and felt that the Facebook executives should have been held personally accountable.

The Republican commissioners, however, have said that they did not have a strong enough case to move it to court. 

See what others are saying: (The Chicago Tribune) (The Washington Post) (The New York Times)

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Meta Reinstates Trump on Facebook and Instagram

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The company, which banned the former president two years ago for his role in inciting the Jan. 6 insurrection, now says the risk to public safety has “sufficiently receded.” 


Meta Ends Suspension

Meta announced Wednesday that it will reinstate the Facebook and Instagram accounts of former President Donald Trump, just two years after he was banned for using the platforms to incite a violent insurrection.

In a blog post, the company said the suspensions would be lifted “in the coming weeks” but with “new guardrails in place to deter repeat offenses.”

Specifically, Meta stated that due to Trump’s violations of its Community Standards, he will face “heightened penalties for repeat offenses” under new protocols for “public figures whose accounts are reinstated from suspensions related to civil unrest.”

“In the event that Mr. Trump posts further violating content, the content will be removed and he will be suspended for between one month and two years, depending on the severity of the violation,” the blog post continued.

The company also noted its updated protocols address content that doesn’t violate its Community Standards but “contributes to the sort of risk that materialized on January 6, such as content that delegitimizes an upcoming election or is related to QAnon.”

However, unlike direct violations, that content would have its distribution limited, but it would not be taken down. As a penalty for repeat offenses, Meta says it “may temporarily restrict access to […] advertising tools.”

As far as why the company is doing this, it explained that it assessed whether or not to extend the “unprecedented” two-year suspension it placed on Trump back in January of 2021 and determined that the risk to public safety had “sufficiently receded.”

Meta also argued that social media is “rooted in the belief that open debate and the free flow of ideas are important values” and it does not want to “get in the way of open, public and democratic debate.”

“The public should be able to hear what their politicians are saying — the good, the bad and the ugly — so that they can make informed choices at the ballot box,” the tech giant added.

Response

Meta’s decision prompted widespread backlash from many people who argue the former president has clearly not learned from the past because he continues to share lies about the election, conspiracy theories, and other incendiary language on Truth Social.

“Trump incited an insurrection. And tried to stop the peaceful transfer of power,” Rep. Adam Schiff (D-Ca.) tweeted. “He’s shown no remorse. No contrition. Giving him back access to a social media platform to spread his lies and demagoguery is dangerous. @facebook caved, giving him a platform to do more harm.”

According to estimates last month by the advocacy groups Accountable Tech and Media Matters for America, over 350 of Trump’s posts on the platform would have explicitly violated Facebook’s policies against QAnon content, election claims, and harassment of marginalized groups.

“Mark Zuckerberg’s decision to reinstate Trump’s accounts is a prime example of putting profits above people’s safety,”  NAACP President Derrick Johnson told NPR

“It’s quite astonishing that one can spew hatred, fuel conspiracies, and incite a violent insurrection at our nation’s Capitol building, and Mark Zuckerberg still believes that is not enough to remove someone from his platforms.”

However, on the other side, many conservatives and Trump supporters have cheered the move as a win for free speech.

Others, like Rep. Jim Jordan (R-Oh.) also asserted that Trump “shouldn’t have been banned in the first place. Can’t happen again.”

Trump himself echoed that point on in a post on Truth Social, where he claimed Facebook has lost billions of dollars both removing and reinstating him.

Such a thing should never again happen to a sitting President, or anybody else who is not deserving of retribution! THANK YOU TO TRUTH SOCIAL FOR DOING SUCH AN INCREDIBLE JOB. YOUR GROWTH IS OUTSTANDING, AND FUTURE UNLIMITED!!!” he continued. 

The question that remains, however, is whether Trump will actually go back to Facebook or Instagram. As many have noted, the two were never his main platforms. Twitter was always been his preferred outlet, and while Elon Musk reinstated his account some time ago, he has not been posting on the site.

There is also the question of how Truth Social — which Trump created and put millions of dollars into — would survive if he went back to Meta’s platforms. The company is already struggling financially, and as Axios notes, if Trump moves back, it signals to investors that he is not confident in the company.

On the other hand, Trump’s lawyers formally petitioned Meta to reinstate him, which could indicate that this goes beyond just a symbolic win and is something he actually wants. Additionally, if he were to start engaging on Facebook and Instagram again, it would immediately give him access to his over 57 million followers across the two platforms while he continues his 2024 presidential campaign.

See what others are saying: (NPR) (Axios) (The New York Times)

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Meta Encouraged to Change Nudity Policy in Potential Win For Free The Nipple Movement

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The company’s oversight board said Meta’s current rules are too confusing to follow, and new guidelines should be developed to “respect international human rights standards.”


Rules Based in “A Binary View of Gender”

In a move many have described as a big step for Free The Nipple advocates, Meta’s oversight board released a decision Tuesday encouraging the company to modify its nudity and sexual activity policies so that social media users are treated “without discrimination on the basis of sex or gender.”

The board—which consists of lawyers, journalists, and academics—said the parent company of Facebook and Instagram should change its guidelines “so that it is governed by clear criteria that respect international human rights standards.”

Its decision came after a transgender and nonbinary couple had two different posts removed for alleged violations of Meta’s Sexual Solicitation Community Standard. Both posts included images of the couple bare-chested with their nipples covered along with captions discussing transgender healthcare, as they were fundraising for one of them to undergo top surgery.

Both posts, one from 2021 and another from 2022, were taken down after users reported it and Meta’s own automated system flagged it. The posts were restored after an appeal, but the oversight board stated that their initial removal highlights faults in the company’s policies. 

“Removing these posts is not in line with Meta’s Community Standards, values or human rights responsibilities,” the board said in its decision, 

According to the board, Meta’s sexual solicitation policy is too broad and creates confusion for social media users. The board also said the policy is “based on a binary view of gender and a distinction between male and female bodies.

“Such an approach makes it unclear how the rules apply to intersex, non-binary and transgender people, and requires reviewers to make rapid and subjective assessments of sex and gender, which is not practical when moderating content at scale,” the decision continued. 

Free the Nipple Movement

The board stated that the rules get especially confusing regarding female nipples, “particularly as they apply to transgender and non-binary people.”

While there are exceptions to Meta’s rules, including posts in medical or health contexts, the board said that these exceptions are “often convoluted and poorly defined.” 

“The lack of clarity inherent in this policy creates uncertainty for users and reviewers, and makes it unworkable in practice,” the decision said. 

The board’s recommended that Meta change how it manages nudity on its platforms. The group also requested that Meta provide more details regarding what content specifically violates its Sexual Solicitation Community Standard. 

For over a decade, Meta’s nudity policies have been condemned by many activists and users for strictly censoring female bodies. The Free the Nipple movement was created to combat rules that prevent users from sharing images of a bare female chest, but still allow men to freely post topless photos of themselves. 

Big names including Rihanna, Miley Cyrus, and Florence Pugh have advocated for Free the Nipple.
Meta now has 60 days to respond to the board’s recommendations. In a statement to the New York Post, a spokesperson for the company said Meta is “constantly evaluating our policies to help make our platforms safer for everyone.”

See What Others Are Saying: (Mashable) (The New York Post) (Oversight Committee Decision)

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Amazon Labor Union Receives Official Union Certification

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The company already plans to appeal the decision.


Amazon Labor Union’s Victory 

The National Labor Relations Board on Wednesday certified the Amazon Labor Union (ALU) Staten Island election from April, despite Amazon’s objections. 

After Staten Island staffers won the vote to unionize by 500 votes in the spring of 2022, Amazon quickly filed a slew of objections, claiming that the ALU had improperly influenced the election. Amazon pushed for the results to be overturned. 

Now, the National Labor Relations Board has dismissed Amazon’s allegations and certified the election. This certification gives legitimacy to the ALU and puts Amazon in a position to be penalized should they decide not to bargain with the union in good faith. 

“We’re demanding that Amazon now, after certification, meet and bargain with us,” ALU attorney Seth Goldstein said to Motherboard regarding the certification. “We’re demanding bargaining, and if we need to, we’re going to move to get a court order enforcing our bargaining rights. It’s outrageous that they’ve been violating federal labor while they continue to do so.”

Negotiate or Appeal 

Amazon has until Jan. 25 to begin bargaining with the ALU, or the online retailer can appeal the decision by the same deadline. The company has already announced its plan to appeal. 

“As we’ve said since the beginning, we don’t believe this election process was fair, legitimate, or representative of the majority of what our team wants,” Amazon spokesperson Kelly Nantel, said in a statement.

This win comes after two recent defeats in ALU’s unionization efforts. The union lost an election at a facility in Albany and another in Staten Island. 

ALU’s director Chris Smalls told Yahoo! Finance that he is unconcerned about these losses.

“For us, whatever campaign is ready to go, the Amazon Labor Union is going to throw their support behind it, no matter what…We know that it’s going to take collective action for Amazon to come to the table,” he told the outlet. “So, for us, it’s never unsuccessful. These are growing pains, and we’re going to fight and continue to grow.”

See what others are saying: (Vice) (NPR) (Bloomberg)

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