The Federal Trade Commission [3] (FTC) announced Tuesday [4] that it reached a proposed settlement with the social networking site Facebook for charges it has failed to keep promises about guarding the privacy of information of its consumers. The settlement comes in response to a two-year federal investigation and demands by a coalition [5] of pro-privacy groups, including the Center for Media and Democracy, to investigate these claims in order to protect the some 200 million Facebook users in the United States.

The FTC's eight-count complaint charged Facebook with deceiving users by telling them that their information was held private, but then repeatedly made that information available to be shared to the public. The federal agency described Facebook's behavior as "unfair and deceptive," and in violation of federal law. Under the settlement, Facebook must undergo twenty years of biennial independent audits and it is now required to get consent from its users before sharing information. Each violation could result in a penalty of up to $16,000.

Sharing and Tracking In Violation of Privacy

The letter sent out in September by CMD and other groups focused on two Facebook policies [6] in violation of users' privacy. One, called "frictionless sharing," allows an individual's information to be shared without agreement through services like the Facebook "Ticker" or "Timeline." The other, "post-log-out tracking," is the secret monitoring of users' Internet activity after they have logged out of Facebook by placing cookies on a user's browser whenever the user visits Facebook.

Facebook Admits it Made a "Bunch of Mistakes"

In response to the settlement, the company's founder Mark Zuckerberg posted a blog saying that his company has a "good history of providing transparency and control over who can see your information," but admits that the company has made a "bunch of mistakes."

Zuckerberg also noted that he has appointed two employees to new corporate officer roles where they will be tasked with managing privacy within the company's policy and products.

A "Step in the Right Direction"

"This is a step in the right direction, but Facebook continues to expose its users to substantial erosion of their privacy rights. People need to remain vigilant, because of Facebook's ongoing changes that help advertisers and others target Facebook users," said Lisa Graves of the Center for Media and Democracy.

Marc Rotenberg, executive director of the Electronic Privacy Information Center [7] told the New York Times, "We hope they will establish a high bar for privacy protection ... but we do not have in the United States a comprehensive privacy framework. There is always a risk other companies will come along and create new problems."

U.S. Senator John Kerry issued a statement [8] that said that the FTC "succeeded here in protecting consumers' right to privacy in an increasingly complex technological environment."