SEC charged Facebook after privacy probe

SEC charged Facebook – The social network must pay the FTC over its handling of user data.

 

SEC charged Facebook after privacy probe – The Securities Exchange Commission  announced on Wednesday that it will fine Facebook $100 million as part of a settlement in relation to a probe into the social network’s handling of users’ data. The investor protection agency alleged that Facebook’s public disclosures didn’t offer sufficient warning that developers and other third parties, who in obtaining user data, may have violated the social network’s policies or failed to gain user permission.

“Public companies must accurately describe the material risks to their business,” said Stephanie Avakian, co-director of the SEC’s enforcement division. “As alleged in our complaint, Facebook presented the risk of misuse of user data as hypothetical when they knew user data had in fact been misused. Public companies must have procedures in place to make accurate disclosures about material business risks.”

The FTC also unveiled its $5 billion settlement with Facebook on Wednesday over the Cambridge Analytica scandal.

Facebook said the agreement “will mark a sharper turn toward privacy, on a different scale than anything we’ve done in the past,” while CEO Mark Zuckerberg said in a separate statement that the social network would make “major structural changes” to how it builds products and conducts business.

Facebook has already set aside the money to pay the fine.

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