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FTC could hold Zuckerberg personally accountable for Facebook lapses, report says

Facebook shareholders are getting fed up with Zuckerberg but can’t do anything about him
Facebook Chief Executive Mark Zuckerberg leaves a hotel in Dublin after a meeting with politicians April 2 to discuss regulation of social media and harmful content.
(Carson Niall/PA Photos / TNS)

Federal regulators are reportedly considering seeking some kind of oversight of Mark Zuckerberg’s leadership of Facebook over the social network giant’s mishandling of users’ personal information.

Discussions between Facebook and the U.S. Federal Trade Commission officials about its data-handing lapses have touched on holding the chief executive personally accountable, the Washington Post reported Friday. Zuckerberg controls a majority of Facebook’s voting stock and has run the company since starting it at Harvard in 2004.

The Post quoted two anonymous sources familiar with the discussions. It said putting restraints on Zuckerberg could send a message to other tech giants that the FTC could hold their executives accountable for privacy misdeeds.

The FTC had no comment, and Facebook did not immediately respond to a request for comment.

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The commission opened an investigation into Facebook last year after revelations that data mining firm Cambridge Analytica had gathered details on as many as 87 million Facebook users without their permission.

The FTC has been examining whether that massive breakdown violated a settlement that Facebook reached in 2011 after government regulators concluded the Menlo Park, Calif., company had repeatedly broken its privacy promises to users, who now number 2.3 billion globally.

The FTC decree, which runs through 2031, requires that Facebook get its users’ consent to share their personal information in ways that aren’t allowed by their privacy settings.

The Post previously reported the FTC is considering hitting Facebook with a multibillion-dollar fine. That would top its previous record fine of $22.5 million, which it dealt to Google in 2012 for bypassing the privacy controls in Apple’s Safari browser.

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Facebook has in the past year been buffeted by media coverage highlighting what critics call a cavalier attitude toward protecting user privacy and data — and in failing to prevent the dissemination of hate speech and misinformation on the biggest communications medium in history.

On Thursday, its Instagram subsidiary said in a blog post that millions more users were affected by a password security lapse than Facebook acknowledged when announcing the problem nearly four weeks ago.

In the initial announcement it had said tens of thousands of passwords were stored on the site in plain text, meaning company employees could search them. It said the passwords were stored on internal company servers, where no outsiders could access them.

The possible action by the FTC to hold Zuckerberg personally responsible for the social media site’s woes comes amid a legal dispute over reports Facebook has submitted to the agency about the adequacy of its privacy-protection measures.

Facebook has had to submit to privacy assessments every other year for 20 years as part of the 2011 settlement over charges that it deceived users when it said they could keep their data private.

Facebook hired PricewaterhouseCoopers LLP to conduct the reviews, and the consulting firm has concluded that the privacy program was working. But in three reports that the FTC has made public, dozens of pages have been blanked out

The Electronic Privacy Information Center is suing the FTC to make the disclosures under government open-records laws amid questions about the accuracy and thoroughness of those checkups given Facebook’s string of missteps.

The FTC redacted parts of the reports under laws intended to protect business and trade secrets, but the nonprofit privacy center is questioning those judgments.

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“The FTC’s investigation into Facebook is one of the most high-profile and important privacy enforcement issues in the United States over the last 10 years, and the public has a right to know what’s going on,” said Alan Butler, a senior counsel at the privacy center.

Facebook told the FTC and privacy center on April 9 it planned to intervene in the lawsuit in an effort to block the release of the unredacted records. The judge gave Facebook until May 3 to file.

Alysa Hutnik, who chairs the privacy practice at Kelley Drye & Warren LLP, said it’s not always easy to say whether an agency should treat business information as confidential, particularly with respect to privacy protections, which some tech companies now view as part of their competitive value.

She said Facebook may seek to postpone the case because a dispute over similar issues is headed to the Supreme Court.

PwC declined to comment.

Bloomberg contributed to this report.


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