US probe into Facebook may hold Zuckerberg liable: Sources

In past investigations into Facebook, the US government opted to spare Mr Mark Zuckerberg, Facebook's co-founder, chief executive and board chairman, from the most onerous scrutiny. A sanction from the Federal Trade Commission would be seen as a rare
In past investigations into Facebook, the US government opted to spare Mr Mark Zuckerberg, Facebook's co-founder, chief executive and board chairman, from the most onerous scrutiny. A sanction from the Federal Trade Commission would be seen as a rare rebuke on him and the tech giant's historic "move fast and break things" ethos.PHOTO: BLOOMBERG

Federal regulators said to be mulling over how to make him accountable for data lapses

WASHINGTON • US federal regulators investigating Facebook for mishandling its users' personal information have set their sights on the company's chief executive officer Mark Zuckerberg, exploring his past statements on privacy and weighing whether to seek new, heightened oversight of his leadership.

The discussions about how to hold Mr Zuckerberg accountable for Facebook's data lapses have come in the context of wide-ranging talks between the Federal Trade Commission (FTC) and Facebook that could settle the government's more than one-year-old probe, according to two people familiar with the discussions. Both requested anonymity because the FTC's inquiry is confidential under law.

Such a move could create new legal, political and public-relations headaches for one of Silicon Valley's best-known - and image-conscious - corporate leaders.

Mr Zuckerberg is Facebook's co-founder, CEO, board chairman and most powerful stock owner, and a sanction from the federal government would be seen as a rare rebuke on him and the tech giant's historic "move fast and break things" ethos.

Often, the FTC does not target executives in cases in which it finds a company's business practices have violated Web users' privacy.

But critics said targeting Mr Zuckerberg could show other tech giants that the agency is willing to hold top executives directly accountable for their firms' repeated data misdeeds.

"The days of pretending this is an innocent platform are over, and citing Mark in a large-scale enforcement action would drive that home in spades," said Mr Roger McNamee, an early investor in the company and one of Mr Zuckerberg's critics.

 
 
 

In past investigations into Facebook, the US government opted to spare Mr Zuckerberg from the most onerous scrutiny. Documents obtained from the FTC under federal open-records rules reflect that the agency considered, then backed down from, putting Mr Zuckerberg directly under order during its last settlement with Facebook in 2011. Had it done so, Mr Zuckerberg could have faced fines for future privacy violations.

Asked about the negotiations, Facebook said in a statement that it "hope(s) to reach an appropriate and fair resolution". The FTC declined to comment for this story.

The FTC began investigating Facebook in March last year, amid reports that Cambridge Analytica, a political consultancy, improperly accessed data on roughly 87 million of the social networking site's users.

The federal probe has focused on whether Facebook violated an agreement, brokered with the FTC in 2011, that required the company to improve its privacy practices.

Since then, Facebook has acknowledged a series of additional privacy lapses, including an admission on Thursday that it mishandled millions of users' passwords on Instagram, its photo-sharing service.

Appearing before Congress last year, Mr Zuckerberg sought to take personal responsibility for a range of his company's recent missteps, including Facebook's entanglement with Cambridge Analytica.

"I started Facebook, I run it and I'm responsible for what happens here," he told lawmakers.

But the Facebook chief still maintained that the company did not commit a "violation of the consent decree" it had struck with the FTC.

Settling that federal inquiry, now more than a year old, could force Facebook to make significant concessions, including paying a fine ranging into the billions of dollars, The Washington Post has reported.

 
 

It could lead to new obligations targeting Mr Zuckerberg, too. One idea that has been raised could require him or other executives to certify the company's privacy practices periodically to the board of directors, two people familiar with the matter said, along with heightened oversight by the FTC.

The idea of holding Mr Zuckerberg accountable - and even subjecting him to penalties for Facebook's alleged mishandling of users' data - has gained political traction in Washington.

On Thursday, Senator Richard Blumenthal said the company's top executive "wasn't just aware of Facebook's invasion of consumer privacy, he signed off on it and publicly downplayed legitimate concerns".

"Holding Mark Zuckerberg and other top Facebook executives personally at fault and liable for further wrongdoing would send a powerful message to business leaders across the country: You will pay a hefty price for skirting the law and deceiving consumers," Mr Blumenthal said.

WASHINGTON POST

A version of this article appeared in the print edition of The Straits Times on April 20, 2019, with the headline 'US probe into Facebook may hold Zuckerberg liable: Sources'. Print Edition | Subscribe