Much of the FTC's complaint against Facebook centers on a series of changes that the company made to its privacy controls in late 2009. The revisions automatically shared information and pictures about Facebook users, even if they previously programmed their privacy settings to shield the content. Among other things, people's profile pictures, lists of online friends and political views were suddenly available for the world to see, the FTC alleged.
The complaint also charges that Facebook shared its users' personal information with third-party advertisers from September 2008 through May 2010 despite several public assurances from company officials that it wasn't passing the data along for marketing purposes.
Facebook believes that happened only in limited instances, generally when users clicked on ads that appeared on their personal profile pages. Most of Facebook's users click on ads when they are on their "Wall" — a section that highlights their friends' posts — or while visiting someone else's profile page.
The FTC also alleged that Facebook displayed personal photos even after users deleted them from their accounts.
Facebook's agreement with the FTC requires the company to obey privacy laws or face fines of $16,000 per day for each violation.
"Facebook's innovation does not have to come at the expense of consumer privacy," FTC Chairman Jon Leibowitz. "The FTC action will ensure it will not."
The FTC's commissioners unanimously approved the agreement with Facebook. The FTC is accepting public comments through Dec. 30 before deciding whether to finalize the settlement.
Facebook's stepped-up commitment to privacy wasn't enough to satisfy Jeff Chester, executive director for the Center for Digital Democracy, one of the privacy watchdog groups that prodded the FTC investigation. In a statement, Chester called on Zuckerberg and Facebook's board of directors to resign so that the company could hire more trustworthy replacements.
"They misled consumers and should pay a price beyond a 20-year agreement to conduct their business practices in a more above-board fashion," Chester said.
Facebook sought to downplay the gravity of the FTC's allegations, maintaining that it had already addressed most of the privacy complaints. Zuckerberg said the website has added more than 20 new privacy features in the past 18 months.
To underscore its commitment, Facebook has created two new executive positions — Michael Richter as chief privacy officer of products and Erin Egan as chief privacy officer of policy.
"This means we're making a clear and formal long-term commitment to do the things we've always tried to do and planned to keep doing — giving you tools to control who can see your information and then making sure only those people you intend can see it," Zuckerberg wrote in his blog post.
AP Technology Writer Barbara Ortutay in New York contributed to this story.
The FTC's complaint: http://1.usa.gov/uUrr4z