In 2012, Facebook settled an FTC privacy investigation by promising a host of privacy protections (that they never delivered on); now, the FTC is probing Facebook's noncompliance and they've demanded that the company let them look at Zuck's email, which prompted the company's legal team to have a look therein, and they really didn't like what they saw.
Anonymous sources told the WSJ that Mark Zuckerberg's emails with other top execs revealed that they didn't make the FTC consent decree "a priority" as they planned the company strategy.
This matter a lot. The FTC is a weird beast: for the most part, it operates on a two-strikes model. When the FTC determines that your company has done something sleazy, it generally sends you a stern, "Cut that shit out or else" letter, sometimes with specific instructions for conducting your business in the future without getting in trouble.
This can feel really wrong. Remember when a bunch of laptop rental companies admitted that they'd been spying on their customers, making covert videos of them in the nude, recording them having sex, taking pics of their kids, plundering their music collections, etc, and the FTC ordered them to end the practice -- unless they added some fine print to their terms of service "notifying" customers that they did this kind of thing?
The thing is, while the FTC is a sweetheart the first time around, if you make it come back at you, it can be a serious adversary: the FTC's powers to punish companies that fail to live up to the orders they get the first time around are prodigious, including massive fines and refer execs to the DOJ to face personal, criminal liability.
So if Zuck and co's emails show that they never intended to comply with the FTC's initial consent decree, this could be a big, big problem for Facebook.
Within the company, the unearthing of the emails in the process of responding to a continuing federal privacy investigation has raised concerns that they would be harmful to Facebook -- at least from a public-relations standpoint -- if they were to become public, one of the people said. The potential impact of the internal emails has been a factor in the tech giant's desire to reach a speedy settlement of the investigation by the Federal Trade Commission, one of the people said. Facebook is operating under a 2012 consent decree with the agency related to privacy, and the emails sent around that time suggest that Mr. Zuckerberg and other senior executives didn't make compliance with the FTC order a priority, the people said.
It couldn't be determined exactly what emails the agency has requested and how many of them relate to Mr. Zuckerberg. The FTC investigation began more than a year ago after reports that personal data of tens of millions of Facebook users improperly wound up in the hands of Cambridge Analytica, a data firm that worked on President Trump's 2016 campaign. The FTC is investigating whether that lapse violated the 2012 consent decree with the agency in which Facebook agreed to better protect user privacy. Since the Cambridge Analytica affair, other privacy missteps have come to light, adding to Facebook's headaches.
Facebook Worries Emails Could Show Zuckerberg Knew of Questionable Privacy Practices [John D. McKinnon, Emily Glazer, Deepa Seetharaman and Jeff Horwitz/WSJ]
(Image: Brian Solis, CC-BY)