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Privacy group files legal challenge to Facebook’s US$5b FTC settlement
[NEW YORK] A prominent public interest research group is challenging the Federal Trade Commission's (FTC) US$5 billion privacy settlement with Facebook in court, calling it an unjustified victory for the tech giant and a bad deal for hundreds of millions of consumers who depend on its services.
On Friday, the group, the Electronic Privacy Information Center, filed a motion to intervene in the FTC's case against Facebook in a bid to block automatic approval of the settlement in its current form.
The group, known as EPIC, argues that the proposed deal fails to ensure consumer privacy, partly because it grants Facebook immunity from thousands of outstanding consumer complaints it faces over issues as diverse as children's privacy, health privacy and its use of facial-recognition technology.
"The proposed order wipes Facebook's slate clean without Facebook even having to admit guilt for its privacy violations," the group's complaint says.
EPIC requested a hearing where the court could review the fairness of the Facebook agreement and consider consumer groups' complaints. If the court decides to grant such a hearing, a judge could require the trade commission to review outstanding consumer complaints and alter the terms of the proposed settlement.
EPIC, which said it had several outstanding complaints against Facebook, also argues in its filing that the trade commission violated its own mandate to thoroughly review consumer complaints when it agreed, as part of the proposed deal, to shield the tech giant from pending accusations lodged by consumers and consumer groups. The filing, in federal court in Washington, effectively challenges the FTC's fitness to act as the nation's privacy enforcer even as some members of Congress are floating the idea of creating a separate data protection agency to safeguard Americans' personal information.
James A Kohm, associate director for the enforcement division of the FTC's Bureau Of Consumer Protection, said the agency had thoroughly investigated the complaints it had received about Facebook from consumer groups and media reports as well as information it obtained independently from other sources.
One complaint from a consumer group, for instance, was related to Facebook's use of facial-recognition technology. The FTC said it had addressed issues raised by the complaint in several of the settlement's provisions, including a requirement that Facebook ask consumers to opt in to new uses of the technology that the company had not previously disclosed.
As is typical in such investigations, some consumer complaints could not be substantiated, Mr Kohm said.
He added that the FTC's settlement with Facebook cited the company for provable violations.
"There's a very big difference between making an accusation and proving it in court," Mr Kohm said. "Sometimes the road between those two things is very long."
Facebook declined to comment.
The FTC commissioners voted to approve the consent order this month in a 3-2 decision. The deal would close a federal investigation into whether Facebook violated a 2011 settlement with the agency by allowing Cambridge Analytica, a consulting firm that worked with President Donald Trump's 2016 campaign, to harvest the personal data of tens of millions of Facebook users. The 2011 agreement, prompted in part by complaints filed by EPIC, barred Facebook from deceptive data-mining practices.
The latest settlement drew sharp public criticism when it was made public Wednesday.
Perhaps its most contentious provision would give Facebook and its officers blanket immunity from any known complaints that the company violated the 2011 settlement order, or deceived consumers, before June 12.
In the eight years since the 2011 consent decree, consumers and groups have filed at least 26,000 complaints against Facebook, according to data that EPIC obtained from the trade commission under public records requests. Consumers filed more than 8,000 complaints in 2018 alone, the records show.
The FTC's two Democratic commissioners voted against the settlement, arguing in dissenting opinions that the scope of the immunity given to Facebook was unwarranted.
"This shield represents a major win for Facebook," wrote Rohit Chopra, one of the Democratic commissioners, "but leaves the public in the dark as to how the company violated the law and what violations, if any, are going unaddressed."