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$5 Billion FTC Fine: What It Means for Marketers

Jul 30, 2019 9:30:00 AM

On July 12, 2019, the Federal Trade Commission (FTC) fined Facebook with a record-setting $5 billion for violations to the 2012 agreement Facebook entered with the FTC.

Under the 2012 consent decree, Facebook was required to adhere to certain rules that protected their users’ privacy.

After a series of privacy-related scandals and violations with regard to how Facebook collected, used, shared, and published their users’ data, the FTC subjected Facebook to 20 years of privacy audits.

The highest penalties from privacy enforcement

Some of the issues that led to the $5 billion settlement were Facebook’s failure to obtain consent before a user’s information was shared beyond established privacy settings and Facebook’s decision to make certain aspects of a user’s profile public by default.

Along with the $5 billion fine, Facebook will also be required to adhere to new, stricter measures when it comes to protecting user data and privacy.

Carolyn Everson, VP of Global Marketing, has already sent a memo containing steps on how Facebook plans to address the issue. Their plans include setting up an independent board to oversee privacy, reporting about privacy on a regular basis, putting more stringent policies in place to protect user privacy.

How the FTC fine affects Facebook marketers

Now the Facebook marketing has become a powerful and crucial branch of digital marketing, the FTC fine calls into question how the more stringent data and privacy policies will affect marketers and marketing within the platform.

How the Facebook FTC ruling affects marketers

Many news outlets have already suggested that Facebook’s core ad functionalities should not be affected, but Facebook marketing extends far beyond the reach of paid advertising. One of the major points in the Cambridge Analytica scandal was the use of third-party apps and how much they compromised user data. With this new settlement with the FTC, Facebook marketers using app data to learn about and engage with Facebook users could find their sources of information and means of communication severely limited.

For the past year, even before the settlement hit, Facebook has already been tightening its data privacy and security measures. This has affected Facebook advertising and the ability to create really granular custom audiences, messenger and chatbot marketing, and marketing on Facebook apps. 

Now that FTC wants a stricter privacy structure and access to tools that will allow them to closely monitor Facebook’s actions, marketers should expect that the audience data they were able to gather more freely and easily before will now be restricted. Consent should also play a major role, especially in messenger marketing. Obtaining consent before sending Facebook messages will be vital, and Messenger marketers need to be prepared for this the way email marketers prepared for and continuously deal with GDPR.

For now, more information about the formal terms and conditions of the settlement is needed to know exactly how this decision affects Facebook marketers. However, it’s safe to say the stricter privacy and data usage measures will have a ripple effect throughout the biggest social network and social marketing platform in the world.

Written by Jason Boehle