Facebook claimed a settlement with the US Federal Trade Commission (FTC) over privacy violations will require a fundamental shift in the way it does business, as critics blasted the deal for failing to do enough to hold the social media giant accountable.

The company agreed to pay an agency-record $5 billion fine; submit to the oversight of an independent committee on privacy-related matters and third-party audits of its privacy programme; and designate compliance officers who will submit quarterly reports to the FTC.

It must also implement new privacy practices including password encryption and increased scrutiny of third-party apps to ensure compliance with privacy policies; and cannot use phone numbers provided for two-factor authentication for advertising purposes.

In a statement, Facebook said the deal will see it make “a sharper turn toward privacy, on a different scale than anything we’ve done in the past”.

The settlement closed a 16-month investigation initiated after the Cambridge Analytica data breach, which found Facebook repeatedly deceived users about its data-sharing practices and handed information to third-party app developers even when users activated restrictive privacy settings.

Separately, the FTC filed suit against data analytics company Cambridge Analytica, accusing it of using deceptive tactics to harvest the personal information of tens of millions of Facebook users. The company initiated insolvency proceedings in May 2018.

Dissent
The deal drew fire from two of the five-person FTC. In a statement, Commissioner Rebecca Slaughter said the settlement failed to place “meaningful limitations on how Facebook collects, uses, and shares data”, adding legal immunity granted to the company and its executives is “far too broad”.

As it did with Cambridge Analytica, Slaughter said the FTC should have taken legal against Facebook.

Commissioner Rohit Chopra agreed, noting on Twitter: “Cambridge Analytica’s tactics of profiling and targeting users were a small-scale reflection of Facebook’s own practices. Notably, the FTC is holding individuals from Cambridge Analytica accountable for misconduct. Not so for Facebook.”

“Facebook’s flagrant violations were a direct result of their business model of mass surveillance and manipulation, and this action blesses this model. The settlement does not fix this problem.”