Facebook reported near privacy accord with FTC

— -- Facebook is on the verge of being hit with a Federal Trade Commission consent decree establishing 20 years of federal oversight of the company's privacy practices, according to a report.

The social-networking giant has agreed to a proposed settlement containing sanctions stemming from sweeping changes the company made to its privacy policies in December 2009, according to a Wall Street Journal report that cites unnamed sources.

The Journal reported Thursday that the proposed settlement requires final approval from the agency's commissioners. The FTC reportedly will require Facebook to obtain "express affirmative consent" if the company makes "material retroactive changes" to its standing privacy policies.

The agreement also would require Facebook to submit to independent privacy audits for 20 years, according to the report.

"This is potentially the most significant action by the Federal Trade Commission on consumer privacy to date," said Marc Rotenberg, executive director of the Electronic Privacy Information Center, who urged the FTC investigation.

The FTC and Facebook declined to comment.

In March, Google agreed to submit to 20 years of independent audits and implement a comprehensive privacy policy to terminate an FTC investigation into allegations that the search giant used deceptive tactics in introducing Google Buzz, a short-lived social network.

In early February 2010, Google surprised many people by piggy-backing Buzz onto the Gmail accounts of some 176 million users of its free Web mail service. To instantly establish a massive community of Buzz users interacting with each other, Google activated an "auto-follow" feature that selected up to 50 of a user's Gmail contacts and designated them as Buzz followers.

In November 2010, to settle a civil lawsuit stemming from the launch of Buzz, Google agreed to pay $8.5 million into an independent fund set up to support privacy organizations.

It remains to be seen whether Facebook will face monetary damages. In December 2009, the company announced with great fanfare the changes to its already complicated privacy settings. However, many consumers found the changes confusing.

EPIC and nine other groups soon filed a complaint with the FTC, noting that third-party developers gained deeper access to user profiles. EPIC called the new privacy settings "unfair and deceptive" and asked the FTC to compel Facebook to restore privacy safeguards.