SAN FRANCISCO — Facebook was ordered Wednesday to create new layers of oversight for its collection and handling of users’ data by the Federal Trade Commission, as the agency detailed a privacy settlement with the social network that became a referendum on how aggressive US regulators would be against big tech companies.
Under the agreement, the FTC mandated that the Silicon Valley company add new positions and practices to increase the transparency and accountability of how it treats people’s information. The agency also formally imposed a record $5 billion fine against Facebook for deceiving users about their ability to control the privacy of their personal data.
Yet the measures, which the FTC’s commissioners approved in a 3-2 vote this month, drew sharp criticism for not going far enough in curbing the data habits of the world’s largest social media company. Republican and Democratic lawmakers pilloried the settlement as a drop in the bucket for Facebook and said the FTC failed to limit a core practice that has repeatedly raised privacy questions: the company’s gathering, sharing, and use of people’s personal information.
That puts US regulators in a difficult position as authorities around the world have stepped up their actions to crimp the power of tech companies like Facebook, Google, Amazon, and Apple. Over the past few years, the US has been seen as a lesser force in tech regulation, especially compared with European officials who have imposed a series of large penalties against the tech giants.
The FTC agreement “utterly fails to penalize Facebook in any effective way,’’ said Senator Josh Hawley, a Missouri Republican. Senator Ron Wyden, an Oregon Democrat who is pushing for new federal privacy laws, said the settlement would not deter Facebook from further privacy violations.
Within the FTC, the settlement was divisive, with the agency’s three Republican commissioners voting to approve the deal while the two Democratic commissioners dissented. The agreement stopped short of more punitive measures that the FTC had previously discussed against Facebook, including holding chief executive Mark Zuckerberg personally liable for missteps and potentially taking the company to court. The fine was also a fraction of Facebook’s $56 billion in annual revenue.
The agency also agreed the settlement would shield Facebook from known claims of violations before June 12, 2019, essentially giving the company a pass on its past. And it provided immunity to Facebook officers and directors.
In a statement, the FTC’s Republican commissioners said the agreement “will provide significant deterrence not just to Facebook, but to every other company that collects or uses consumer data.’’ The FTC’s two Democratic commissioners disagreed. “I fear it leaves the American public vulnerable,’’ said Rebecca Kelly Slaughter, a Democratic commissioner.
Zuckerberg said in a Facebook post that the agreement would “reduce the number of mistakes we make and help us deliver stronger privacy protections for everyone.’’
