Facebook must stop trading users’ phone numbers, ban dodgy apps after multi-billion dollar fine

Facebook is about to make some big changes to the way it handles your personal information after a multi-billion dollar fine.

Facebook will be forced to make big changes to its platform after a ruling and $US5 billion ($A7.17 billion) fine by America’s Federal Trade Commission. Picture: AAP

Facebook must let users know when their faces are being scanned, stop trading their phone numbers for advertising dollars, and ban dodgy third-party apps under a sweeping review of the tech giant’s privacy misdeeds.

The new regulations, handed down by America’s Federal Trade Commission today, come in addition to the creation of a privacy oversight committee and a record-breaking $US5 billion ($A7.17 billion) fine for breaking a 2012 undertaking.

But social media experts have questioned whether the recommendations would give users enough control over their data, and called the penalty “negligible” given the scale of Facebook’s revenue.

The FTC handed down its findings over the Cambridge Analytica data scandal last year, in which the social media giant secretly shared the private information of more than 50 million users with a third party which allegedly used them to influence elections.

The action broke an undertaking Facebook made to the FTC in 2012, leading to a fine “20 times greater than the largest privacy or data security penalty ever imposed worldwide”.

‘Unprecedented’: Facebook fined $7 billion

Facebook CEO Mark Zuckerberg said the ruling would require “a fundamental shift” in the social network. Picture: AP

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” FTC chairman Joe Simons said.

But the Commission also demanded a series of changes be made to Facebook, Instagram and WhatsApp that would affect users.

They include providing “clear and conspicuous” warnings when it used facial recognition technology, kicking out third parties who could not justify their need for users’ information, and checking user passwords were stored insecurely.

The FTC will also ban Facebook from demanding users hand over passwords to other services, and from using individuals’ phone numbers — provided for two-factor security — for advertising purposes.

The multibillion-dollar company must also establish an “independent privacy committee” to review Facebook’s privacy decisions.

Federal Trade Commission FTC Commissioner Noah Joshua Phillips. Picture: AP

Facebook founder and chief executive Mark Zuckerberg said the ruling followed “months of negotiations” with US authorities, and would require “a fundamental shift” in the social network.

“The accountability required by this agreement surpasses current US law and we hope will be a model for the industry,” he said.

Swinburne University social media director Dr Belinda Barnet cautiously welcomed some of the changes, including the independent committee, but said attention needed to be paid to who would be appointed to it and what powers it would have.

Ultimately, she said, Facebook needed to be reined in with stricter legislation as it could easily afford to pay even this record-breaking fines that was just “a tenth of its annual revenue”.

“Going forward, I don’t think this is going to change the way Facebook make money,” Dr Barnet said.

“Their business is based on using our data to personalise advertising. This is minor progress and I’m worried that Facebook will use it to lull people into a false sense of security.”

The Australian government could issue its own changes to social networks, including Facebook, in the coming weeks when it releases the final recommendations of the Australian Competition and Consumer Commission’s Digital Platforms Inquiry.