Facebook close to privacy settlement with FTC

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Facebook may be preparing to settle charges with the Federal Trade Commission that it deceived users when it changed its privacy settings, a person with knowledge of the settlement, who was not authorized to discuss it, told The Times.

The proposed settlement would require Facebook to get consent from users if it makes changes that are retroactive. The Wall Street Journal first reported the settlement Thursday.

As part of the settlement, which is in part based on a complaint from the Electronic Privacy Information Center, Facebook would have to submit to independent privacy audits for 20 years. (EPIC also filed a supplemental complaint).

The settlement is awaiting final approval from the agency commissioners. Google agreed to a similar settlement in March and agreed to audits.

Spokesmen for Facebook and the FTC declined to comment.

The investigation began in December 2009 when Facebook changed its privacy settings, making parts of users’ profiles -- such as name, photo, gender and friends -- public by default.

Facebook’s approach to privacy has made the world’s most popular social network the target of privacy watchdogs. ‘The FTC has heard from consumers that it must protect their privacy on Facebook. The pending settlement must put users in charge of their Facebook information, putting an end to an out-of-control data-gobbling social media monster,’ said Jeffrey Chester, executive director of the Center for Digital Democracy. ‘But the FTC’s consent decree has to be more than words -- it needs to ensure new rights for consumers in the social media era.’

Facebook’s Mark Zuckerberg and Sheryl Sandberg discussed privacy this week during an hourlong interview with PBS’ Charlie Rose.

Sandberg, the company’s chief operating officer, relayed the story of a man who loses his keys and insists on searching for them only in a circle around a lamppost.

‘Someone says, ‘Why are you only looking under the lamppost? They’re clearly not here,’’ Sandberg said. ‘He’s like, ‘Well, this is the only place I can see.’’

‘We are focused on privacy. We care the most about privacy,’ she continued. ‘We’re the light.’

Facebook has contended for years that it gives users the ability to shield their privacy. It says it’s the target of privacy watchdogs because it’s working to address privacy issues.

Rose pointed out that Facebook may find itself in the cross hairs because it has more information about people than anyone else.

Zuckerberg, the company’s founder and chief executive, countered that users volunteer all of their personal information on Facebook, unlike other Internet giants and advertising networks that compile vast troves of information about people ‘behind your back.’

‘It’s less transparent than what is happening at Facebook,’ he said.

That point of view has not swayed some lawmakers and regulators in the U.S. and abroad.

German authorities said Thursday that they are considering suing Facebook over its use of facial recognition technology.

Johannes Caspar, data protection commissioner for the German state of Hamburg, said he would fine Facebook for ignoring a deadline he set to remove the feature.

Facebook has repeatedly drawn fire in Germany, which has strict privacy laws. It says the feature complies with German law because users can disable it.

‘We believe that any legal action is completely unnecessary. The Tag Suggestions feature on Facebook is fully compliant with EU data protection laws,’ Facebook spokesman Andrew Noyes said in an emailed statement. ‘On top of that, we have given comprehensive notice and education to our users about Tag Suggestions and we provide very simple tools for people to opt out if they do not want to use this feature. We have considered carefully different options for making people even more aware of our privacy policies and are disappointed that the Hamburg DPA has not accepted these.’

The photo tagging feature suggests the names of friends in photos. Facebook rolled out the feature in the U.S. last December and in other countries in June.

Also on Thursday, Reps. Edward Markey (D-Mass.) and Joe Barton (R-Texas) asked Zuckerberg to explain a February patent application they say raises alarm bells about how Facebook tracks users on other websites.

Markey and Barton have raised privacy concerns with Facebook several times this year and have suggested the FTC investigate.

Noyes referred to a statement he posted on Uncrunched last month when the website reported the patent application.

‘Some people have suggested that this application is intended to patent tracking of logged-out users. Nothing could be further from the truth,’ Noyes wrote.

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-- Jessica Guynn