Just as the Facebook IPO speculation was saturating the technology mainstays, Mark Zuckerberg posted a rare message to announce the settlement reached between the social media giant and the Federal Trade Commission.
The FTC finalized an agreement with Facebook about its privacy standards and practices on Tuesday to assure that the sharing epicenter receives consumers' approval before it changes the way it shares their data and will have to undergo periodic audits of their privacy practices for the next 20 years.
The scrutiny over Facebook's privacy has been weighing on the company's business prospects and relieves many analysts now that the company appears to be in the final stages of filing for IPO.
In Zuckerberg's public statement, he laid out the milestones that Facebook has made in creating such a giant social network and admitted that many missteps occurred along the easy.
"I'm the first to admit that we've made a bunch of mistakes," Zuckerberg wrote. "In particular, I think that a small number of high profile mistakes, like Beacon four years ago and poor execution as we transitioned our privacy model two years ago, have often overshadowed much of the good work we've done. I also understand that many people are just naturally skeptical of what it means for hundreds of millions of people to share so much personal information online, especially using any one service."
While Facebook has worked to quickly address many of its privacy concerns, they have often been handled in a counter intuitive fashion that usually left users with content going public, that once was meant for private sharing.
Specifically, under the proposed settlement, Facebook is:
- barred from making misrepresentations about the privacy or security of consumers' personal information;
- required to obtain consumers' affirmative express consent before enacting changes that override their privacy preferences;
- required to prevent anyone from accessing a user's material no more than 30 days after the user has deleted his or her account;
- required to establish and maintain a comprehensive privacy program designed to address privacy risks associated with the development and management of new and existing products and services, and to protect the privacy and confidentiality of consumers' information; and
- required, within 180 days, and every two years after that for the next 20 years, to obtain independent, third-party audits certifying that it has a privacy program in place that meets or exceeds the requirements of the FTC order, and to ensure that the privacy of consumers' information is protected.
Zuckerberg also announced that he has created two new corporate officer roles to create a stronger commitment toward privacy and the transparency of its actions. In the new role of Chief Privacy Officer will be former Partner and Co-chair of the global privacy and data security practice of Covington & Burling, Erin Egan.
Egan will lead in increasing engagement in the global public discourse and debate about online privacy to gain "feedback from regulators, legislators, experts and academics from around the world is incorporated into Facebook's practices and policies."
And Michael Richter, the current chief privacy counsel, will become chief privacy officer of products. Richter will expand, improve and formalize the company's existing program of internal privacy review.
This was a much needed announcement prior to any official statement from the company regarding its IPO so that the company didn't have an ongoing FTC investigation overshadowing, what will definitely be, a monumental public offering.
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