Did Facebook Settle or Did the FTC?

It depends who you read. Most news outlets characterize it as Zuckerberg and co. settling with the FTC. And, of course, this is how the FTC characterizes it with their news release titled “Facebook Settles FTC Charges That It Deceived Consumers By Failing To Keep Privacy Promises.” But the New York Times headline reads “FTC Settles Privacy Issue at Facebook.” It’s an interesting choice, as is the photo the Times chose, which shows a smiling, genial, likable Zuckerberg. Many news outlets choose photos of him that are less appealing.

Bottom line: a settlement was reached, and according to Wired, it was merely hand-slap. Indeed, it does seem like what Facebook agreed to–20 years of monitoring–isn’t much of a punishment given how devastating the report was. Take a minute and read this list of lies Facebook told its users:

Facebook told users they could restrict sharing of data to limited audiences – for example with “Friends Only.” In fact, selecting “Friends Only” did not prevent their information from being shared with third-party applications their friends used.

Facebook had a “Verified Apps” program & claimed it certified the security of participating apps. It didn’t.

Facebook promised users that it would not share their personal information with advertisers. It did.

Facebook claimed that when users deactivated or deleted their accounts, their photos and videos would be inaccessible. But Facebook allowed access to the content, even after users had deactivated or deleted their accounts.

Facebook claimed that it complied with the U.S.- EU Safe Harbor Framework that governs data transfer between the U.S. and the European Union. It didn’t.

That’s not to mention the other things you already know about, such as:

In December 2009, Facebook changed its website so certain information that users may have designated as private – such as their Friends List – was made public. They didn’t warn users that this change was coming, or get their approval in advance.

Facebook represented that third-party apps that users’ installed would have access only to user information that they needed to operate. In fact, the apps could access nearly all of users’ personal data – data the apps didn’t need.

There are no financial penalties for Facebook’s persistent deception; in fact, the settlement clears the way for Facebook’s IPO.

Mashable’s Lance Ulanoff has an interesting take on this–that the FTC has ruined Facebook with the new regulations:

Facebook is, on its own, and thanks to the FTC, adding layer upon layer of oversight. The only logical outcome from this is fewer products and less innovation. That’s right; flashes of brilliance like Timeline could be few and far between as they get stuck in continual privacy review loops. Eagan, Richter and the FTC could all err on the side of caution, which essentially means steering the Facebook bus over to the shoulder and not driving at all.

He also argues that consumer complaints about privacy violations have been hypocritical:

You joined Facebook by the millions (along with a number of other prominent social networks) and have fully embraced all that they give you: new connections, more consistent interaction with close and distant relatives, discovery, entertainment and games, and a way to see your life as never before (you really need to check out Timeline). Yet, for every Facebook privacy misstep you sought to take Facebook and Zuckerberg to the woodshed.

Ulanoff’s point is that Facebook was doing business, not building a utopian society. And if we want our businesses to be creative at the same time they make money, we have to give them a little breathing room.

Apple is a good example of a successful business that was able to do incredibly creative things because its leader, Steve Jobs, was given a free hand. Only one problem with this analogy: Mark Zuckerberg is not a visionary genius like Jobs. And he seems to lack a moral center.