Calls for Zuckerberg’s Ouster, Possibility of More Than $1B in Fines Loom in Facebook Scandal

Facebook Founder and CEO Mark Zuckerberg speaks during the TechCrunch Conference at SF Design Center on Sept. 11, 2012 in San Francisco. (Photo by C Flanigan/WireImage)
Flanigan/WireImage via Wikimedia Commons / CC BY 2.0

MENLO PARK, Calif. – As Mark Zuckerberg prepared for his Tuesday Senate testimony and Wednesday House hearing, The Washington Post reported there’s a call for the Facebook CEO’s ouster and that record fines may loom for the embattled social media giant. (For full coverage of Zuckerberg's Tuesday appearances before the Senate Commerce and Judiciary Committees, click here and here.)

The Post reports that Scott Stringer, New York City's comptroller and custodian of the city's $193 billion pension fund, which holds $895 million in Facebook stock, wrote a letter March 27 pushing Facebook to add three new independent directors and replace Zuckerberg with an independent chairman.

“Part of my fiduciary role is to ask questions of this company as it relates to issues they're facing,” said Stringer in an interview last week about his letter. Regarding the Cambridge Analytica revelations, he said, “There’s regulatory risk. There’s revenue risk. There’s reputational risk. And there’s also a genuine risk to our democracy.” 

The paper also reports that three former Federal Trade Commission (FTC) officials said Facebook’s disclosure that its search tools were used to collect data on most of its 2.2 billion users could potentially trigger record fines and create new legal vulnerability for not having prevented risks to user data.

Those officials, all of whom were at the FTC during the privacy investigation that led to a 2011 consent with Facebook, said the company’s latest mishap may violate the decree’s provisions requiring the implementation of a privacy program.

But Facebook’s chief operating officer, Sheryl Sandberg, dismissed concerns about the fines in an interview with Bloomberg News, “I think we’re very confident that that was in compliance with the FTC consent decree,” she said.

Still, David Vladeck, who was head of the FTC’s bureau of consumer protection when the decree was drafted and signed by Facebook, told The Washington Post it is possible that this episode is a violation of the consent decree and that Facebook may face fines of $1 billion or more. 

“The agency will want to send a signal … that [it] takes its consent decrees seriously,” Vladeck said.

In another blow, Charter Communications Chairman and CEO Tom Rutledge, blogged Monday that he hopes Congress cracks down on Facebook and privacy issues.

“Despite our reliance on websites and social media, the truth is, most people don’t know that when they engage in these activities online, many internet companies are collecting a significant amount of information about them and selling it to others for advertising, research and even voter persuasion purposes,” Rutledge writes. “So we are urging Congress to pass a uniform law that provides greater privacy and data security protections and applies the same standard to everybody in the Internet ecosystem, including us.”

Facebook continues efforts to regain trust. On Monday, it announced a new research initiative with seven nonprofits to study the effect of social media on elections. Under the new initiative, social science researchers will propose research projects for peer review based on a set of general research goals. If a proposal is approved, the researchers will receive the anonymized data from Facebook and accompanying funding from the foundations.

Crucially, Facebook “will not have any right to review or approve their research findings prior to publication,” although it may have influence over which projects are approved.

Facebook also unveiled several new measures to limit the amount of data third-party providers can access. Among those changes, Facebook is implementing immediate restrictions on:

  • Events Application Programming Interface (API): Apps using Facebook’s Events API will no longer be able to access the guest list or posts on the event page, and Facebook will now need to approve all apps that seek access to the Events API at all.
  • Groups API: All third-party apps using the Groups API will now need approval from Facebook and an admin to ensure they benefit the group. Apps will no longer be able to access the member list of a group, nor personal information.
  • Pages API: All future access to the Pages API will now need to be approved by Facebook, as opposed to being openly available.
  • Facebook Login: Facebook will now need to approve all apps which request access to information such as check-ins, likes, photos, posts, videos, events, and groups, while access to in-depth personal information will also be cut off. Facebook will also remove a developer’s ability to request data people have shared with them if they haven’t used the app in the last three months.