[Federal Register Volume 76, Number 233 (Monday, December 5, 2011)]
[Notices]
[Pages 75883-75885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-31158]


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FEDERAL TRADE COMMISSION

[File No. 092 3184]


Facebook, Inc.; Analysis of Proposed Consent Order To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order--embodied in the consent 
agreement--that would settle these allegations.

DATES: Comments must be received on or before December 30, 2011.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Facebook, File No. 092 
3184'' on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/facebookconsent, by following the 
instructions on the Web-based form. If you prefer to file your comment 
on paper, mail or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex 
D), 600 Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Laura Berger (202) 326-8364), FTC, 
Bureau of Consumer Protection, 600 Pennsylvania Avenue NW., Washington, 
DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 the 
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that 
the above-captioned consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of thirty (30) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for November 29, 2011), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue NW., Washington, DC 
20580, either in person or by calling (202) 326-2222.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before December 30, 
2011. Write ``Facebook, File No. 092 3184'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to 
remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential,'' as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do 
not include competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept

[[Page 75884]]

confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/facebookconsent by following the instructions on the Web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that Web site.
    If you file your comment on paper, write ``Facebook, File No. 092 
3184'' on your comment and on the envelope, and mail or deliver it to 
the following address: Federal Trade Commission, Office of the 
Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW., 
Washington, DC 20580. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before December 22, 2011. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, a consent agreement from Facebook, Inc. (``Facebook'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement and take appropriate action or make final 
the agreement's proposed order.
    Since at least 2004, Facebook has operated http://www.facebook.com, 
a social networking Web site that enables a consumer who uses the site 
(``user'') to create an online profile and communicate with other 
users. Among other things, a user's online profile can include 
information such as the user's name, a ``profile picture,'' interest 
groups they join, a ``Friend List'' of other users who are the user's 
``Friends'' on the site, photo albums and videos they upload, and 
messages and comments posted by them or by other users. Users can also 
use third-party applications through the site (``Apps'') to, for 
example, play games, take quizzes, track their physical fitness 
routines for comparison to their friends' routines, or receive discount 
offers or calendar reminders. As of August 2011, Facebook had more than 
750 million users.
    The Commission's complaint alleges eight violations of Section 5(a) 
of the FTC Act, which prohibits deceptive and unfair acts or practices 
in or affecting commerce, by Facebook:
     Facebook's Deceptive Privacy Settings: Facebook 
communicated to users that they could restrict certain information they 
provided on the site to a limited audience, such as ``Friends Only.'' 
In fact, selecting these categories did not prevent users' information 
from being shared with Apps that their Friends used.
     Facebook's Deceptive and Unfair December 2009 Privacy 
Changes: In December 2009, Facebook changed its site so that certain 
information that users may have designated as private--such as a user's 
Friend List --was made public, without adequate disclosure to users. 
This conduct was also unfair to users.
     Facebook's Deception Regarding App Access: Facebook 
represented to users that whenever they authorized an App, the App 
would only access the information of the user that it needed to 
operate. In fact, the App could access nearly all of the user's 
information, even if unrelated to the App's operations. For example, an 
App that provided horoscopes for users could access the user's photos 
or employment information, even though there is no need for a horoscope 
App to access such information.
     Facebook's Deception Regarding Sharing with Advertisers: 
Facebook promised users that it would not share their personal 
information with advertisers; in fact, Facebook did share this 
information with advertisers when a user clicked on a Facebook ad.
     Facebook's Deception Regarding Its Verified Apps Program: 
Facebook had a ``Verified Apps'' program through which it represented 
that it had certified the security of certain Apps when, in fact, it 
had not.
     Facebook's Deception Regarding Photo and Video Deletion: 
Facebook stated to users that, when they deactivate or delete their 
accounts, their photos and videos would be inaccessible. In fact, 
Facebook continued to allow access to this content even after a user 
deactivated or deleted his or her account.
     Safe Harbor: Facebook deceptively stated that it complied 
with the U.S.-EU Safe Harbor Framework, a mechanism by which U.S. 
companies may transfer data from the European Union to the United 
States consistent with European law.
    The proposed order contains provisions designed to prevent Facebook 
from engaging in practices in the future that are the same or similar 
to those alleged in the complaint.
    Part I of the proposed order prohibits Facebook from 
misrepresenting the privacy or security of ``covered information,'' as 
well as the company's compliance with any privacy, security, or other 
compliance program, including but not limited to the U.S.-EU Safe 
Harbor Framework. ``Covered information'' is defined broadly as 
``information from or about an individual consumer, including but not 
limited to: (a) A first or last name; (b) a home or other physical 
address, including street name and name of city or town; (c) an email 
address or other online contact information, such as an instant 
messaging user identifier or a screen name; (d) a mobile or other 
telephone number; (e) photos and videos; (f) Internet Protocol (``IP'') 
address, User ID, or other persistent identifier; (g) physical 
location; or (h) any information combined with any of (a) through (g) 
above.''
    Part II of the proposed order requires Facebook to give its users a 
clear and prominent notice and obtain their affirmative express consent 
before sharing their previously-collected information with third 
parties in any way that materially exceeds the restrictions imposed by 
their privacy settings. A ``material . . . practice is one which is 
likely to affect a consumer's choice of or conduct regarding a 
product.'' FTC Policy Statement on Deception, Appended to Cliffdale 
Associates, Inc., 103 F.T.C. 110, 174 (1984).
    Part III of the proposed order requires Facebook to implement 
procedures reasonably designed to ensure that a user's covered 
information cannot be accessed from Facebook's servers after a 
reasonable period of time, not to exceed

[[Page 75885]]

thirty (30) days, following a user's deletion of his or her account.
    Part IV of the proposed order requires Facebook to establish and 
maintain a comprehensive privacy program that is reasonably designed 
to: (1) Address privacy risks related to the development and management 
of new and existing products and services, and (2) protect the privacy 
and confidentiality of covered information. The privacy program must be 
documented in writing and must contain controls and procedures 
appropriate to Facebook's size and complexity, the nature and scope of 
its activities, and the sensitivity of covered information. 
Specifically, the order requires Facebook to:
     Designate an employee or employees to coordinate and be 
responsible for the privacy program;
     Identify reasonably-foreseeable, material risks, both 
internal and external, that could result in the unauthorized 
collection, use, or disclosure of covered information and assess the 
sufficiency of any safeguards in place to control these risks;
     Design and implement reasonable controls and procedures to 
address the risks identified through the privacy risk assessment and 
regularly test or monitor the effectiveness of these controls and 
procedures;
     Develop and use reasonable steps to select and retain 
service providers capable of appropriately protecting the privacy of 
covered information they receive from respondent, and require service 
providers by contract to implement and maintain appropriate privacy 
protections; and
     Evaluate and adjust its privacy program in light of the 
results of the testing and monitoring, any material changes to its 
operations or business arrangements, or any other circumstances that it 
knows or has reason to know may have a material impact on the 
effectiveness of its privacy program.
    Part V of the proposed order requires that Facebook obtain within 
180 days, and every other year thereafter for twenty (20) years, an 
assessment and report from a qualified, objective, independent third-
party professional, certifying, among other things, that it has in 
place a privacy program that provides protections that meet or exceed 
the protections required by Part IV of the proposed order; and its 
privacy controls are operating with sufficient effectiveness to provide 
reasonable assurance that the privacy of covered information is 
protected.
    Parts VI through X of the proposed order are reporting and 
compliance provisions. Part VI requires that Facebook retain all 
``widely disseminated statements'' that describe the extent to which 
respondent maintains and protects the privacy, security, and 
confidentiality of any covered information, along with all materials 
relied upon in making such statements, for a period of three (3) years. 
Part VI further requires Facebook to retain, for a period of six (6) 
months from the date received, all consumer complaints directed at 
Facebook, or forwarded to Facebook by a third party, that relate to the 
conduct prohibited by the proposed order, and any responses to such 
complaints. Part VI also requires Facebook to retain for a period of 
five (5) years from the date received, documents, prepared by or on 
behalf of Facebook, that contradict, qualify, or call into question its 
compliance with the proposed order. Part VI additionally requires 
Facebook to retain for a period of three (3) years, each materially 
different document relating to its attempt to obtain the affirmative 
express consent of users referred to in Part II, along with documents 
and information sufficient to show each user's consent and documents 
sufficient to demonstrate, on an aggregate basis, the number of users 
for whom each such privacy setting was in effect at any time Facebook 
has attempted to obtain such consent. Finally, Part VI requires that 
Facebook retain all materials relied upon to prepare the third-party 
assessments for a period of three (3) years after the date that each 
assessment is prepared.
    Part VII requires dissemination of the order now and in the future 
to principals, officers, directors, and managers, and to all current 
and future employees, agents, and representatives having supervisory 
responsibilities relating to the subject matter of the order. Part VIII 
ensures notification to the FTC of changes in corporate status. Part IX 
mandates that Facebook submit an initial compliance report to the FTC 
and make available to the FTC subsequent reports. Part X is a provision 
``sunsetting'' the order after twenty (20) years, with certain 
exceptions.
    The purpose of the analysis is to aid public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the complaint or proposed order, or to modify the 
proposed order's terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2011-31158 Filed 12-2-11; 8:45 am]
BILLING CODE 6750-01-P