The settlement, announced Thursday, closed the FTC's first action against a social networking site for faulty security. Twitter's failings led to two well-publicized attacks, one of which resulted in a hacker gaining access to several high-profile accounts, including that of then President-elect Barack Obama.
The settlement requires Twitter to take a number of security steps to protect user data, steps the site said it has already taken. "Even before the agreement, we'd implemented many of the FTC's suggestions and the agreement formalizes our commitment to those security practices," Twitter said in response to the FTC's settlement announcement.
Nevertheless, the FTC said Twitter failed to provide the security it promised users.
"When a company promises consumers that their personal information is secure, it must live up to that promise," David Vladeck, director of the FTC's Bureau of Consumer Protection, said in a statement. "Likewise, a company that allows consumers to designate their information as private must use reasonable security to uphold such designations."
The first security breach occurred in January 2009 when a hacker used an automated password-generation tool to continuously try to log in to a person's account. In some cases, the hacker made thousands of attempts before striking pay dirt. Twitter's culpability was in failing to implement password rules that would have led to stronger passwords, the FTC said. In addition, Twitter should have had technology in place to lock out the hacker after several failed attempts.
The hacker accessed the accounts of 45 Twitter users, including Facebook, Fox News, The Huffington Post, Obama, Britney Spears and CNN host Rick Sanchez. In some cases, the hacker sent phony tweets under the accounts. Tweets are the short messages of 140 characters or less people broadcast to followers on the site.
A bogus tweet sent from Obama's account offered his more than 150,000 followers a chance to win $500 in free gasoline, according to the FTC.
The second breach occurred in April 2009 when a hacker broke into a Twitter employee's administrative account by first accessing the employee's Yahoo e-mail account, where the password was stored in plain text.
In gaining access to the administrative account, the hacker could access private information from any Twitter user, according to the FTC. The hacker did post more than a dozen screenshots of Twitter's administrative console on several Web sites.
To help prevent the second breach, Twitter should have prohibited employees from storing passwords within personal e-mail accounts, enforced periodic changes of administrative passwords, restricted access to administrative controls to employees whose jobs required it and imposed other reasonable restrictions on administrative access, the FTC said.
Under the terms of the settlement. Twitter is barred for 20 years from misleading users about the extent to which it protects their privacy and personal information. The company also must establish and maintain a "comprehensive information security program," the FTC said. A third party has to assess the program every other year for 10 years.