At this point, data privacy regulators around the world are far too familiar with Facebook’s transgressions.
That’s why it’s no surprise the leaders of several of the biggest data regulators have come together to express their concern over the social media giant’s planned venture into the cryptocurrency space. FTC Commissioner Rohit Chopra, U.K. Information Commissioner Elizabeth Denham, European Data Protection Supervisor Giovanni Buttarelli, and Canadian Privacy Commissioner Daniel Therrien are among seven to sign a joint statement explaining the privacy expectations associated with Facebook and the Libra Association.
Facebook announced in June its subsidiary Calibra as a digital wallet for Libra, a global currency powered by blockchain technology. Facebook has taken the lead on the project, though a number of other major companies, including PayPal, MasterCard, Visa, Spotify, Uber, and Lyft, are among the founding members of the Libra Association.
“As representatives of the global community of data protection and privacy enforcement authorities, collectively responsible for promoting the privacy of many millions of people around the world, we are joining together to express our shared concerns about the privacy risks posed by the Libra digital currency and infrastructure,” the joint statement reads. “Other authorities and democratic lawmakers have expressed concerns about this initiative. These risks are not limited to financial privacy, since the involvement of Facebook Inc., and its expansive categories of data collection on hundreds of millions of users, raises additional concerns.”
The statement continues: “Many of us in the regulatory community have had to address previous episodes where Facebook’s handling of people’s information has not met the expectations of regulators, or their own users. Because of this, we are sharing our expectations of the Libra Association, Facebook’s subsidiary Calibra, and any future Libra digital wallet provider (collectively referred to as the Libra Network) in protecting the personal information it will handle.”
The data privacy regulators’ takes issue with how Facebook and Calibra “have failed to specifically address the information handling practices that will be in place to secure and protect personal information,” a worry strengthened by the 2020 projected launch of the currency. Thus, the statement lists six questions the regulators expect to have the Libra Association “satisfactorily address” prior to implementation:
- How can global data protection and privacy enforcement authorities be confident the Libra Network has robust measures to protect the personal information of network users?
- How will the Libra Network incorporate privacy-by-design principles in the development of its infrastructure?
- How will the Libra Association ensure all processors of data within the Libra Network are identified and are compliant with their respective data protection obligations?
- How does the Libra Network plan to undertake data protection impact assessments, and how will the Libra Network ensure these assessments are considered on an ongoing basis?
- How will the Libra Network ensure its data protection and privacy policies, standards, and controls apply consistently across the Libra Network’s operations in all jurisdictions
- Where data is shared among Libra Network members, what data elements will be involved? To what extent will it be de-identified, and what method will be used to achieve de-identification? How will Libra Network ensure data is not reidentified, including by use of enforceable contractual commitments with those with whom data is shared?
“Data protection authorities may individually follow up with Libra with more specific questions as the proposals and service offering develops,” the statement adds.
Since the announcement of Libra, Facebook has come under fire from multiple angles, with U.S. Treasury Secretary Steven Mnuchin even suggesting the offering could represent a “national security issue.” Others in Washington have also voiced their concerns and cautioned a thorough process of evaluation.
Facebook itself acknowledged in a filing with the Securities and Exchange Commission last month that there can be no assurance Libra’s planned launch “will be made available in a timely manner, or at all.” The company noted its lack of experience in the digital currency sector “may adversely affect our ability to successfully develop and market these products and services.”
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