No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
    • On-Demand Webinars: Earn CEUs
  • Subscribe
Jump to a Section
  • At the Office
    • Ethics
    • HR Compliance
    • Leadership & Career
    • Well-Being at Work
  • Compliance & Risk
    • Compliance
    • FCPA
    • Fraud
    • Risk
  • Finserv & Audit
    • Financial Services
    • Internal Audit
  • Governance
    • ESG
    • Getting Governance Right
  • Infosec
    • Cybersecurity
    • Data Privacy
  • Opinion
    • Adam Balfour
    • Jim DeLoach
    • Mary Shirley
    • Yan Tougas
No Result
View All Result
Corporate Compliance Insights
Home Data Privacy

$5B Facebook Privacy Settlement with the FTC Imposes Stringent Third-Party Requirements

What the Largest Privacy Fine in History Means for Companies

by Russ Berland
August 6, 2019
in Data Privacy, Featured
facebook icon and thumbs down reaction on pink background

The FTC has handed Facebook the largest privacy fine in history. Russ Berland explores how privacy risks in the U.S. are greater than in any other country right now.

The Federal Trade Commission announced a $5 billion settlement with Facebook after a broad investigation by the FTC and DOJ into how the company lost control over massive amounts of personal data and misled its users. It is the largest fine in FTC history — and many times larger than any privacy fine anywhere in the world. Importantly, the FTC settlement not only imposed a fine, but also mandated how Facebook would need to manage its privacy and third-party relationships to avoid further fines from the FTC.

Facebook agreed to the $5 billion settlement after years of damaging admissions about the company’s privacy practices, such as the inadvertent exposure of up to 87 million users’ information to the political analysis firm Cambridge Analytica, as well as misleading privacy notices. The settlement resolves a formal complaint by the FTC alleging that Facebook “used deceptive disclosures and settings” that were unfair and deceitful practices against users’ privacy and violated a prior agreement Facebook had signed with the FTC in 2012.

“The magnitude of the $5 billion civil penalty we have imposed is unprecedented in global privacy enforcement. This penalty is more than 200 times greater than the largest privacy penalty previously imposed in the United States and is more than 20 times greater than the largest fine imposed in Europe, pursuant to the General Data Protection Regulation,” said Chairman Joseph Simons in a recent FTC press conference. “The enormity of this penalty resets the baseline for privacy cases and serves as an important deterrent for future violations.” Chairman Simons also stated that the Facebook order “requires greater oversight of third parties.”

The order not only establishes the record-setting fine amount, but also establishes privacy program requirements.  Commissioner Noah Joshua Philips stated:

“This is a watershed moment in privacy enforcement and privacy governance.” 

Regarding the broader implications of the settlement to other companies doing business in the U.S., Commissioner Philips said, “The price of privacy violations just went up” and “Management matters. Governance matters … in the context of privacy.” His specific advice to companies after the Facebook settlement is, “paying attention to privacy issues is something companies ought to consider whether to elevate to the board level. … Is privacy an increasingly important issue on which all firms should focus from an oversight perspective, from a management perspective? Absolutely!” He also stated that firms following this advice would, “focus the board on privacy in a way that it focuses on audit and executive compensation, which boards take very seriously.”

The FTC settlement requires Facebook to establish a program to oversee the privacy and security obligations of third parties and app developers. The order states that Facebook must “select and retain service providers capable of safeguarding” Facebook users’ personal information and “contractually require service providers to implement and maintain safeguards” for that information. For any app developer who is purchasing Facebook users’ personal information for their own purposes, the developer is required to self-certify that they are meeting stringent privacy and security requirements. Facebook has extensive monitoring requirements for these developers, including manual reviews, automated scans, regular assessments, audits and technical or operation tests at least every 12 months. In addition, these third-party relationships must be addressed in Facebook’s privacy risk assessments and privacy program design, implementation, annual evaluation and enhancement.

After the $5 billion Facebook settlement, the U.S. has now overtaken Europe as the jurisdiction with the greatest privacy risks. This fine is larger than any hypothetical fine possible under the EU’s GDPR. Because of the U.S.’ patchwork, segmented and now state-by-state approach to privacy, it is more complex to meet privacy requirements in the U.S. than in the comprehensive data protection framework in the E.U.

And now, the costs of not meeting those requirements just went up – way up. In addition, on January 1, 2020, every company doing any business in California will have to determine whether they are covered by the new California Consumer Privacy Act, with its own requirements and large penalties. Plus, 16 other states are now in the process of enacting privacy statutes similar to California’s. Operationally, this would be an ideal time to review how privacy is addressed in the organization, as well as the design, implementation and evaluation of that privacy program.

If the FTC is to be believed, privacy is now a priority corporate risk deserving of the board’s and executives’ attention.


Tags: California Consumer Privacy Act (CCPA)DOJFederal Trade Commission (FTC)GDPRSocial Media RiskThird Party Risk Management
Previous Post

“Everybody Wants To Do The Right Thing.” Really?

Next Post

NAVEX Global Acquires Lockpath

Russ Berland

Russ Berland

Russ Berland is a seasoned leader who creates value in an organization by leading high-performance teams in law, compliance and risk management. He works with innovative, multinational organizations and has achieved measurable and timely results in the areas of law, compliance, strategic planning, international business and risk management. As an engineer and former federal court law clerk, he achieves business objectives and solves problems via deep experience, innovation with sound judgment and effective and efficient management of people, resources and costs. Russ is Chief Compliance Officer of Aventiv Technologies in Dallas, Texas.

Related Posts

wall of filing cabinets holding private information

Wave of State Data Protection Laws Is a Gathering Compliance Nightmare

by Scott Allendevaux
September 26, 2023

In absence of a single national data privacy law, companies continue to face a multi-state balancing act. Data privacy practitioner...

department of justice building

Keeping Track of US Efforts to Stem Corruption at Home & Abroad

by Susana Sierra
September 25, 2023

Susana Sierra of BH Compliance explores why shifted priorities should cause all U.S. companies with Latin American connections to take...

data privacy on bumper sticker

A National Privacy Law Doesn’t Appear on the Near-Horizon in the US. Globally, It’s a Different Story.

by Kevin Coy and Erin Doyle
August 8, 2023

International law around data privacy continues to evolve as jurisdictions around the world seek to develop and refine their regulatory...

small plant budding in cracked soil

Globally, Regulators Are Making It Clear: FinServ Firms Must Become Resilient

by Rich Cooper
July 24, 2023

The relentless upheaval of the past few years has uniquely affected the global financial services sector. And regulators are responding....

Next Post
connected blue puzzle pieces joining skyscrapers

NAVEX Global Acquires Lockpath

Available SQ
New call-to-action

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment Sanctions SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2023 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
    • On-Demand Webinars: Earn CEUs
  • Subscribe

© 2023 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT