Facebook's 'deceptive' privacy claims: The federal crackdown

After asserting that Facebook had made "unfair and deceptive" claims about its privacy policies, the Federal Trade Commission reached a settlement with the social network Tuesday. The settlement, which coincides with reports that an imminent IPO could value Facebook at more than $100 billion, outlines a series of changes to the company's privacy practices. Here's what you should know:

Why are the Feds cracking down?

It's no secret that Facebook has a long, troubled history regarding users' privacy. In a 19-page complaint, the FTC officially questioned Facebook's claims that it never shares user information with advertisers. Among the agency's other allegations: That Facebook misrepresented the amount of user information third-party apps could access; that it failed to warn users of changes to privacy settings; and that, despite Facebook's reassurances, users' photos and videos often remained accessible long after accounts were deactivated.

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And what exactly is in this settlement?

First and foremost, the social network will now be required to notify users of changes to privacy settings and have users opt in before changes take effect. Additionally, Facebook must guarantee that all content related to an account becomes inaccessible 30 days after a user deletes his account. Furthermore, Facebook must be more forthright about the degree of security and privacy users can expect regarding their personal information.

How will the FTC ensure that Facebook is complying?

The social network must submit to independent audits of its privacy practices every two years for the next two decades.

How has Facebook reacted?

In a statement posted to Facebook Tuesday, CEO Mark Zuckerberg admitted that "we've made a bunch of mistakes" and maintained that, prior to the settlement, "Facebook had already proactively addressed many of the concerns the FTC raised." He also announced that two new corporate officers will be charged with overseeing the company's privacy practices.

So... what does this mean for me?

"In theory," users can now "rely on information about privacy from Facebook as being accurate and complete," says Larry Magid at The Huffington Post. But "users will still have to be vigilant about what they post on Facebook," because there's still a "strong possibility" that personal information will be misused.

Is there a downside?

Mashable's Lance Ulanoff worries that new red tape could "ruin" Facebook by slowing innovation and making the company overly cautious. "The Facebook bus is not parked, but it may be traveling well below the speed limit — and you have only the FTC and yourselves to blame."

Sources: Facebook, Guardian, Huffington Post, Mashable, Techno Buffalo, Wall Street Journal, Washington Post