In less than two weeks, the Federal Trade Commission (FTC) has arranged enforcement settlement actions against multiple major companies for a violation of their consumer practices. The authority entailed in their power for enforcement provided by the Federal Trade Commission Act (FTC Act) is a strong vehicle that is used by the FTC to regulate businesses and individuals. While the FTC can take a broad measure for enforcement options, one of the most used options are its orders and settlement agreements. These agreements place limitation on future actions of individuals and corporations and can permanently enjoin business and individuals from engaging in certain behavior, be subjected to monitoring compliance, reporting and recordkeeping requirements and may have requirements to assist the FTC with litigation against other definitions. The FTC has recently entered settlement agreements and levied fines against Facebook, Google and HireRight Solutions, Inc.
Facebook: The FTC has announced a final settlement with Facebook regarding user privacy. The settlement involved allegations that Facebook had “deceived [its customers] by telling them that they could keep their information on Facebook private . and then repeatedly allowing it to be shared and made public.” The FTC, however, has not leveraged financial penalties against Facebook—since this is the initial agreement and no fines can be initiated unless the agreement has been violated. Facebook, nevertheless, subject to the conditions of the settlement had to promise to give its users “clear and prominent notice” and obtain user consent before sharing any information beyond their privacy settings. Facebook will also be required to submit to biennial privacy audits for a period of 20 years and develop a comprehensive privacy program.
Google: Google has agreed to pay 22.5 million dollars in settlement to the FTC for charges involving the tracking of cookies on Apple’s Safari internet browser. This is the largest penalty ever levied on a company by the FTC. While Google had initially provided that it would not use tracking cookies or targeted ads in the web browser, a “loophole” was discovered, which was in violation of a previous settlement agreement between the FTC and Google. This “loophole” allegedly allowed Google to use computer code to trick Apple’s Safari web browser to monitor users via cookies. The fine is possible because Google had previously signed a consent decree in October 2011 with the FTC promising not to misrepresent its privacy settings. The penalty for violating the agreement was $16,000 per violation per day. Google’s actions occurred in spite of a web page that informed users that they could relay on Safari’s privacy settings to block unwanted tracking. The FTC settlement also requires Google to disable all tracking cookies that it had informed that would not be tracked.
HireRight: The FTC has a settlement agreement with HireRight Solutions, Inc., an employment screening company in which was alleged to have violated the Fair Credit Reporting Act. The penalty of 2.6 million dollars, which is the second largest under the Fair Credit Reporting Act, was alleged to have operated as a consumer reporting agency, but did not comply with the requirements of the Fair Credit Reporting Act. HireRight provides background reports on current and prospective employees—which contact public record information, including criminal histories. Since employers use the reports to make hiring and benefits decisions and since the company regularly sells such products in interstate commerce it functions as a consumer reporting agency. As a result HireRight violated requirements of the Fair Credit Reporting Act by: “(1) failing to ensure maximum accuracy of its background reports, specifically noting that some background reports failed to reflect expungement of criminal records or provided obviously erroneous consumer report information (2) failing to provide consumers with access to information in their files and closed dispute investigations without written notice, and (3) failing to follow requirements that background screeners who use public information notify consumers that such information is reported or to ensure the reported information is complete and up-to-date.” The FTC consent order settlement requires HireRight to pay a settlement penalty of 2.6 million, and requires the company to remedy the alleged Fair Credit Reporting Act violations, create and retain certain records and submit reports to demonstrate compliance with the law and obligations of the settlement.