FTC may force firms to admit guilt in future settlement deals

FTC may force firms to admit guilt in future settlement deals

Summary: The FTC allowed both Facebook and Google to settle with nothing more than a slap on their wrists. But the Commission's own policies may change after the two firms walked away with their innocence intact.

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Two high profile privacy cases involving both Facebook and Google could spark a change in policy that would see future companies admitting guilt as part of settlement cases. 

Facebook also saw a similar ruling on Friday. The social network agreed to a privacy policy audit every two years by a third-party for 20 years following a 2009 investigation that found Facebook to have exposed private user information that users had previously set to private.

Also last week, the U.S. Federal Trade Commission allowed Google to settle a case for $22.5 million -- which it could recoup in just five hours -- which saw the search giant bypass Safari privacy settings. Crucially, Google retained its innocence.

But there were no words like "guilt" or "admission" in the final judgments. Despite the two firms shelling out to make their cases evaporate into the ether and a mild rebuke from the press, as far as the FTC is concerned, the two companies have done no wrong.  

But that may change. The FTC is looking to change its policies to allow firms to settle, but face blame for their actions, according to The New York Times.

The FTC said in both statements:

"The complaint is not a finding or ruling that the defendant has actually violated the law. This consent order is for settlement purposes only and does not constitute an admission by the defendant that the law has been violated."

But J. Thomas Rosch, the FTC commissioner, may not agree with the Commission's own policies regarding the terms of language that are used in such cases.

"I can live with "neither admits nor denies'," he said speaking to the Times, but he warned that the FTC was "inviting denials of liability in every case in the future."

He noted the U.S. Securities and Exchange Commission had better policies, meaning firms that refused to admit the allegations "is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations."

The majority of FTC commissioners disagreed with Rosch's assertions, claiming that a denial of guilt undermined the settlement process, they remain open-minded about a change to FTC policy.

While the FTC said it wanted "to avoid any possible public misimpression that the commission obtains settlements when it lacks reason to believe that the alleged conduct occurred," both Facebook and Google's penalties may be the last seen for some time if Rosch gets his way. 

Topics: Google, IT Priorities, Legal, Privacy

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3 comments
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  • Accurate approximation

    As I have said a few times here on ZDNET, most likely the best approximation is to assume that all the major players operate on just the wrong side of the law. A 1 billion dollar fine is simply bad publicity ... and no problem to shareholders it nets a monopoly for 10 years, drives a major competitor out of business or assures profit of 3 billion a quarter.
    Even if the actions are not unlawful ... there are invariably unethical.
    jacksonjohn
  • As it should be

    Either the defendent is guilty and should be compelled to admit guilt as part of the cost of settling, or they're innocent and giving in to save legal fees (when they should fight on). Either way, settling without an admission of blame is a miscarriage of justice.
    John L. Ries
  • Admitting guilt?

    Hah! I'll believe it when I see it--and I'm not even from Missouri. Personally, I think they ought to make it retroactive--by default.
    SPLF
    spixleatedlifeform