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Former CIA Clandestine Operative
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Retired Canadian Astronaut & Author
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FTC fines Facebook $5 billion over Cambridge Analytica scandal

The company must also appoint an independent privacy committee to its board of its directors.

FTC fines Facebook $5 billion over Cambridge Analytica scandal
  • The FTC said Facebook violated a 2012 agreement it made with the agency over user data.
  • Facebook must restructure its board of directors, undergo regular privacy audits and pay a $5 billion fine.
  • Still, some say the punishment doesn't go far enough.

The Federal Trade Commission (FTC) has ordered Facebook to create new layers of oversight on how it handles user data, and to pay a $5 billion fine, according to an agreement announced Wednesday between the company and the federal agency.

The punishment results from an FTC investigation into Facebook that was prompted after news broke of the 2018 Cambridge Analytica scandal. Cambridge Analytica was a British consulting firm that used a third-party app to harvest personal data from approximately 87 million Facebook users.

By letting this third-party app collect users' data without their clear knowledge and consent, the FTC said Facebook violated a 2012 settlement order it had reached with the social media company.

Under the new agreement, Facebook must add an independent privacy committee to its board of directors, which the FTC wrote will remove "unfettered control by Facebook's CEO Mark Zuckerberg over decisions affecting user privacy." This new committee will be charged with appointing "compliance officers" who can be held accountable if the company mishandles users' data. Facebook must also submit to regular privacy audits.

"The $5 billion penalty against Facebook is the largest ever imposed on any company for violating consumers' privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide," said FTC officials in a press statement.

But some think the punishment is merely a slap on the wrist. The FTC's sole two Democratic commissioners disagreed with their three Republican colleagues over the new settlement, which stopped short of holding Zuckerberg personally accountable for mishandling user data, and also granted immunity to Facebook executives for actions taken before June 12, 2019.

"I fear it leaves the American public vulnerable," Rebecca Kelly Slaughter, a Democratic commissioner, told The New York Times.

"While it is difficult in this case to quantify the economic value of the violations to the company, there is good reason to believe $5 billion is a substantial undervaluation," Slaughter wrote in a statement to CNBC.

Facebook said the new agreement represents a "fundamental shift" in their approach to user privacy.

"It will mark a sharper turn toward privacy, on a different scale than anything we've done in the past," Facebook staff wrote in a blog post. "We will be more robust in ensuring that we identify, assess, and mitigate privacy risk. We will adopt new approaches to more thoroughly document the decisions we make and monitor their impact. And we will introduce more technical controls to better automate privacy safeguards."

The FTC also ordered Facebook to implement several other new privacy requirements:

  • Facebook must exercise greater oversight over third-party apps, including by terminating app developers that fail to certify that they are in compliance with Facebook's platform policies or fail to justify their need for specific user data;
  • Facebook is prohibited from using telephone numbers obtained to enable a security feature (e.g., two-factor authentication) for advertising;
  • Facebook must provide clear and conspicuous notice of its use of facial recognition technology, and obtain affirmative express user consent prior to any use that materially exceeds its prior disclosures to users;
  • Facebook must establish, implement, and maintain a comprehensive data security program;
  • Facebook must encrypt user passwords and regularly scan to detect whether any passwords are stored in plaintext; and
  • Facebook is prohibited from asking for email passwords to other services when consumers sign up for its services.

Facebook was also fined $100 million on Wednesday by the Securities and Exchange Commission for misleading investors after the Cambridge Analytica story broke. Facebook also faces a separate lawsuit from the Department of Justice over claims that the company "repeatedly used deceptive disclosures and settings to undermine users' privacy."

It's unclear whether the new penalty will actually force Facebook to "fundamentally shift" how it handles user privacy. But, at least according to the FTC's three Republican commissioners, it didn't seem reasonable, legally speaking, to push for harsher punishments at this time.

"Is the relief we would obtain through this settlement equal to or better than what we could reasonably obtain through litigation?" they told The New York Times. "If the answer had been 'no,' it would have made sense to aggressively move forward in court. The answer, however, was 'yes.'"

Take your career to the next level by raising your EQ

Emotional intelligence is a skill sought by many employers. Here's how to raise yours.

  • Daniel Goleman's 1995 book Emotional Intelligence catapulted the term into widespread use in the business world.
  • One study found that EQ (emotional intelligence) is the top predictor of performance and accounts for 58% of success across all job types.
  • EQ has been found to increase annual pay by around $29,000 and be present in 90% of top performers.
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Yale scientists restore cellular function in 32 dead pig brains

Researchers hope the technology will further our understanding of the brain, but lawmakers may not be ready for the ethical challenges.

Still from John Stephenson's 1999 rendition of Animal Farm.
Surprising Science
  • Researchers at the Yale School of Medicine successfully restored some functions to pig brains that had been dead for hours.
  • They hope the technology will advance our understanding of the brain, potentially developing new treatments for debilitating diseases and disorders.
  • The research raises many ethical questions and puts to the test our current understanding of death.
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Here’s a map of Mars with as much water as Earth

A 71% wet Mars would have two major land masses and one giant 'Medimartian Sea.'

Just imagine: a Mars that's as wet as Earth.

Image: A.R. Bhattarai, reproduced with kind permission
Strange Maps
  • Sci-fi visions of Mars have changed over time, in step with humanity's own obsessions.
  • Once the source of alien invaders, the Red Planet is now deemed ripe for terraforming.
  • Here's an extreme example: Mars with exactly as much surface water as Earth.
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The entrepreneur's guide to success: Follow these tips

Starting and running a business takes more than a good idea and the desire to not have a boss.

  • Anyone can start a business and be an entrepreneur, but the reality is that most businesses will fail. Building something successful from the ground up takes hard work, passion, intelligence, and a network of people who are equally as smart and passionate as you are. It also requires the ability to accept and learn from your failures.
  • In this video, entrepreneurs in various industries including 3D printing, fashion, hygiene, capital investments, aerospace, and biotechnology share what they've learned over the years about relationships, setting and attaining goals, growth, and what happens when things don't go according to plan.
  • "People who start businesses for the exit, most of them will fail because there's just no true passion behind it," says Miki Agrawal, co-founder of THINX and TUSHY. A key point of Agrawal's advice is that if you can't see yourself in something for 10 years, you shouldn't do it.

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