Facebook, Federal Trade Commission, David Ibsen|Aug 02, 2019|CEP Staff

FTC Levies Record Penalty Against Facebook for Violating User Privacy

Company Concurrently Promises to Provide User Data on Cryptocurrency

Last week, the Federal Trade Commission (FTC) fined Facebook a record-breaking $5 billion for giving third parties access to information that Facebook users did not want to share. Among the settlement’s terms, company CEO Mark Zuckerberg is to remove himself as a privacy decision-maker, create an independent committee to oversee decisions, and have an independent body certify the effectiveness of Facebook’s privacy programs.  

“We commend the FTC for holding Facebook accountable for its repeated lying and blatant disregard for the privacy of its users,” said Counter Extremism Project (CEP) Executive Director David Ibsen. “The tech giant’s behavior is indicative of Facebook’s dismissal of user safety and security. Mr. Zuckerberg and his senior team’s rhetoric and behavior were appalling and fully justify the largest civil penalty ever levied. The FTC’s action marks yet another signifier in 2019 showing how the tide has turned against the tech industry.”

Ibsen further noted Facebook’s continuing issues on the regulatory front. “Moreover, Facebook’s forthcoming cryptocurrency, Libra, has been met by an overwhelming amount of criticism by the financial industry and regulators worldwide. As if right on cue, to justify its plans, Facebook attempted to alleviate concerns over the use of Libra for money laundering and terror financing by promising lawmakers that the company would share user data with law enforcement. The public and policymakers cannot ignore Facebook’s hypocrisy—promising to protect users’ information on the one hand while handing over mass amounts of user data to the government on the other. Clearly, Facebook is using any argument it can to appease legislators and regulators to forestall or water down new laws.”

Facebook’s plans have been met with “significant regulatory scrutiny” worldwide over Libra’s potential abuse for money laundering and other illicit financial activities. CEP has previously written on the number of ways in which its cryptocurrency would be ripe for misuse. Extremist groups such as Order of Dawn have used the cryptocurrency Monero (XMR) to fund firearms and explosive purchases. ISIS has used Bitcoin to anonymously fundraise for terrorist activities. 

Facebook claimed that Libra can actually be used to aid law enforcement. David Marcus, the head of Calibra, the company’s cryptocurrency subsidiary, claimed that Libra “could be a valuable tool … partly because of the vast amounts of information that will be generated about its users.” Marcus also stated that transaction histories and user identities could also be made available. Facebook already has a troubled history when it comes to cooperating with law enforcement. Most infamously, during the New Zealand terrorist attack, the company was unaware of the massacre being livestreamed on its platform until alerted to it by law enforcement.

Lastly, Facebook’s demonstrably false rhetoric on its 99 percent extremist content removal rate indicates that whatever promises it makes should be taken with a grain of salt. A recent Associated Press investigation into whistleblower claims to the Securities and Exchange Commission (SEC) alleges that in reality, Facebook’s extremist content removal rate was just 38 percent, not 99 percent. This disconnect calls into question once again the company’s credibility and its commitment to removing dangerous content from its platform.