News World Facebook’s record fine for privacy abuses fails to sway critics
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Facebook’s record fine for privacy abuses fails to sway critics

Facebook has pledged a major shift in direction on privacy, but will have a long way to go to win back trust. Photo: Facebook
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Facebook has been ordered to cough up a record-breaking fine for allegedly mishandling users’ private data, but critics say it won’t stop the tech giant from repeating past violations.

US regulators set a new precedent when they fined Facebook a whopping $US5 billion ($AU7.1 billion) on Wednesday in response to concerns about the company’s misuse of personal information. 

The penalty forms part of a settlement that also requires Facebook to create an independent privacy committee within its board of directors to hold the social network to account.

The US Federal Trade Commission (FTC) said its fine against Facebook was the “largest ever imposed on any company for violating consumers’ privacy”.

It said the order would impose “unprecedented new restrictions on Facebook’s business operations and creates multiple channels of compliance”.

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” FTC chairman Joe Simons said in a statement. 

“The relief is designed not only to punish future violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.”

Under the new requirements, Facebook CEO Mark Zuckerberg and his employees must submit to FTC quarterly certifications.

The company must also conduct a privacy review of every new or modified product, service, or practice before it is implemented, including for its WhatsApp and Instagram services.

But despite the hefty punishment, some observers are sceptical it will create any real cultural change at Facebook.

FTC commissioner Rohit Chopra slammed the settlement for failing to hold anyone personally responsible, including Mr Zuckerberg or Facebook COO Sheryl Sandberg.

He also criticised it for failing to make big changes to the way Facebook collects data. All it did was force the company to make disclosures and respect user settings.

Mr Chopra said the new requirements wouldn’t stop Facebook from engaging in surveillance or integrating platforms, nor would it clamp down on its data harvesting strategies.

He also noted that top employees at Cambridge Analytica, the political data company at the centre of the 2016 data breach scandal, were being held personally accountable, but “not so for Facebook”.

In a separate agreement with sharemarket regulators, Facebook agreed to a $100 million penalty for making “misleading disclosures regarding the risk of misuse of Facebook user data” in the Cambridge Analytica investigation.

It comes as Facebook prepares to launch its new digital currency, Libra coin, in 2020.

But Facebook users have been urged to be wary of adopting the new technology because of data security fears.

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