Daily Dashboard

FTC Finalizes FB Settlement; Reconsiders Liability Denials


August 13, 2012

The Federal Trade Commission (FTC) finalized a settlement with Facebook last Friday over alleged privacy policy violations. FTC Commissioner Thomas Rosch submitted a dissenting statement, saying the agreement undermined the agency’s authority because it allowed the company to deny any liability, The New York Times reports. Though Rosch agreed with most of the settlement, he said the FTC’s Rules of Practice “do not provide for such a denial” of the charges, adding, “We’re inviting denials of liability in every case in the future.” The other commissioners said they may reconsider the denial of liability policy, the report states. Morrison & Foerester LLP Partner D. Reed Freeman, CIPP/US, told the Daily Dashboard that the FTC "has been accepting settlements with express denials of liability for decades without any adverse consequences. This policy has helped encourage companies to enter into settlements because any follow-on litigation would still bear the burden of proving liability on their theories. Requiring an admission of guilt will lower the settlement rate, increase the litigation rate and draw precious commission resources from investigating and bringing new cases to proving up old ones in court." (Registration may be required to access this story.)
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