Facebook antitrust probes: What FTC's Zuckerberg compliance rules mean for potential regulation

As Facebook and other U.S. tech giants face federal antitrust probes, a Federal Trade Commission provision that holds CEO Mark Zuckerberg personally responsible for compliance with privacy guidelines signaled one form of regulation that could eventually impact executives at companies such as Google and Apple.

Continue Reading Below

The record $5 billion settlement established an independent privacy committee as a check against Zuckerberg’s power and required the 35-year-old CEO to personally certify that Facebook is in compliance with FTC guidelines. Zuckerberg and other Facebook officials could face civil penalties, or even criminal charges, if they make false claims about the company’s compliance.

Facebook executives confirmed Wednesday that both the FTC and Justice Department have opened antitrust investigations into its business. While top executives, such as Apple CEO Tim Cook or Google CEO Sundar Pichai, will face scrutiny in ongoing regulatory efforts, Zuckerberg’s near-unilateral control over Facebook’s internal practices likely pushed the FTC to take unique action against him, according to Arun Sundararajan, a professor at New York University’s Stern School of Business.

“It certainly raises the bar on tech regulation in general. It’s very different from just a dollar fine or collective executive accountability,” Sundararajan told FOX Business. “It’s possible that we will see directives to Apple and to Google and to others that ask for similar guarantees, but I think it’s unlikely.”

TickerSecurityLastChangeChange %
FBFACEBOOK INC.185.85-4.54-2.38%

As Facebook CEO, Zuckerberg personally controls an estimated 60 percent of Facebook’s voting shares. In a May op-ed calling for regulators to break up Facebook, company co-founder Chris Hughes declared that Zuckerberg had “unchecked power” in the social media sector.

The FTC launched a probe into Facebook’s privacy practices in the wake of the Cambridge Analytica scandal, when a British data firm gained improper access to sensitive information of up to 87 million users. In addition to a $5 billion fine, Facebook must submit to the FTC’s privacy guidelines.

Officials said the independent privacy committee meant to remove “unfettered control” by Zuckerberg on Facebook’s user privacy practices.

“The FTC wanting to have Zuckerberg personally accountable may be a reflection of their belief that that’s the only path to accountability at Facebook, because holding the board accountable is less effective than it would be at Google or Apple, where the board has greater oversight power over the top executives,” Sundararajan said.

Zuckerberg has advocated for stronger regulation of the U.S. tech industry in recent months, referencing “harmful content, election integrity, privacy and data portability” as key areas in which government officials should take action.

Representatives from Facebook, Apple, Amazon and Google recently defended their companies’ business practices at a hearing held by a House antitrust panel. The Justice Department’s Antitrust Division announced a sweeping probe into tech industry leaders on Wednesday.

CLICK HERE TO GET THE FOX BUSINESS APP

“Zuckerberg is the face of Facebook, not just as the founder and CEO but as the person who controls the board. Eventually, holding Facebook in particular accountable can only be done if you hold Zuckerberg accountable, so I think this is specific to the Facebook situation,” Sundararajan added.