The $5 billion deal to end a government investigation into the social media company’s privacy practices included a liability waiver that critics are seizing upon as intolerable.
When the Federal Trade Commission came to a $5 billion deal in July with Facebook to resolve an investigation into the social media giant’s privacy practices, most critics at the time focused on how the amount, while potentially representing the largest fine in FTC history, amounted to just a fraction of the company’s $56 billion-a-year revenue. But in recent weeks, observers have zeroed in on another area of worry.
On Tuesday, several public interest groups including Public Citizen, Common Sense Media, and the United States Public Interest Research Group filed an amicus brief before the judge who is examining the proposed decree. They urged U.S. District Court Judge Timothy Kelly to hold the deal to be unfair and inadequate because of a broad release clause in the proposed decree.
The proposed decree came after a yearlong investigation that was triggered by revelations of data mining by the political firm Cambridge Analytica. A complaint filed by the U.S. government alleges Facebook “repeatedly used deceptive disclosures and settings to undermine users’ privacy preferences,” and to move forward, Facebook has agreed to the $5 billion fine plus the establishment of a new privacy committee at the company. In a 3-2 vote, the FTC agreed to “resolve any and all claims that [Facebook], its officers, and directors, prior to June 12, 2019, violated “a prior decree entered by the company back in 2012.
According to the public interest groups, this decree has a glaring problem — it amounts to “broad immunity” from further FTC claims.
“Its broad release would bar the FTC from pursuing any claim concerning an unfair or deceptive consumer practice by Facebook based on information or complaints received by the agency before June of this year,” states the amicus brief (read here). “Such a release, extending far beyond the allegations raised by the government in this case, is neither fair nor reasonable. Complaints that amici and others have sent to the FTC about two topics in particular — Facebook’s interactions with children and its handling of sensitive health data — show the gravity of the potential claims at stake. By signing away these and other potential claims, the FTC would sacrifice the possibility of government-ordered redress for Facebook’s wrongdoing and give up an opportunity to improve consumer protections in the social-media market more broadly.”
The latest bid to discourage the judge from approval comes after Sen. Maria Cantwell (D-Wash) voiced her own concern in an Oct. 10 letter to FTC chairman Joseph Simons.
“The resolution of such unknown claims under the 2012 Order means that no matter what the Commission may learn about Facebook’s previous practices — such as human review of user-generated audio chats without clear disclosures to consumers, and no matter how egregious a violation of the 2012 Order may have occurred — Facebook will not face another penalty by the Commission under the 2012 Order for such practices,” wrote Cantwell.
The senator also seemed to suggest that such a broad liability waiver might be unprecedented. Cantwell asked the FTC to provide a list of other settlements that resulted in releasing “unknown” claims.