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Facebook faces $5 billion fine over privacy violations

  • July 12, 2019

The US Federal Trade Commission (FTC) has approved a $5 billion (€4.43 billion) fine to settle an investigation into Facebook’s handling of user data and privacy lapses, sources cited by Reuters news agency and The Wall Street Journal said Friday.

It would be the largest fine ever imposed by the consumer protection agency but was called inadequate by critics.

Media reports said the settlement was backed in a 3-2 vote, with Republicans in favor of the deal and Democrats against it. News of the settlement pushed Facebook’s share price up 1.8% on Friday.

Facebook and the FTC declined to comment on the deal.

Read more: Facebook’s Cambridge Analytica data scandal: What you need to know

Allegations of data misuse

The FTC investigation was sparked by revelations last year that Cambridge Analytica — a political consultancy hired by US President Donald Trump’s 2016 election campaign as well as Leave.EU, a pro-Brexit group in the UK — had improperly obtained the private information of 87 million Facebook users. 

Facebook has also admitted to giving tech companies like Amazon and Yahoo access to users’ personal data, and it’s been heavily criticized for failing to stop the spread of hate speech and false information on its platform.

Given that Facebook made nearly $56 billion in revenue last year, the FTC fine is unlikely to have a significant impact on the company’s bottom line. Earlier this year, Facebook said it had set aside $3 billion for legal settlements on “user data practices,” and that it expected to potentially have to pay up to $5 billion.

Read more: Cambridge Analytica causing trouble for Facebook in Southeast Asia

‘Slap on the wrist’

According to The Wall Street Journal, the settlement is also expected to include restrictions for how Facebook manages user privacy in the future.

Some critics have called for the FTC to hold Facebook CEO Mark Zuckerberg personally liable for privacy violations, or for the company’s data monitoring practices to be more closely scrutinized.

Representative David Cicilline, a Democrat and chair of a Congressional antitrust panel, called the penalty “a Christmas present five months early.”

“It’s very disappointing that such an enormously powerful company that engaged in such serious misconduct is getting a slap on the wrist. This fine is a fraction of Facebook’s annual revenue. It won’t make them think twice about their responsibility to protect user data,” he said in a statement.

Read more: Facebook’s cryptocurrency plan is taking shape

The settlement still needs to be approved by the Justice Department before it is finalized. It is not yet clear how long that process will take.

  • Glasses with Facebook logo reflected on lenses

    Who’s who in the Cambridge Analytica scandal?

    The faces behind the scandal

    Facebook has been slammed for failing to protect the data of more than 50 million users. Their data was used to further conservative political projects, including Brexit and Donald Trump’s presidential victory. From a former White House strategist to a Canadian whistle blower, here are the people involved in what some are describing as Facebook’s largest data breach.

  • Christopher Wylie, the Cambridge Analytica whistleblower

    Who’s who in the Cambridge Analytica scandal?

    Whistleblower who hacked Facebook

    A 28-year-old Canadian data analytics expert first blew the whistle on the scandal to Britain’s Observer newspaper. Christopher Wylie claims he set up the project for Cambridge Analytica and helped forge ties with Donald Trump’s campaign. He revealed that millions of profiles were hijacked to influence the election. Cambridge Analytica says Wylie has been “misrepresenting himself and the company.”

  • Alexander Nix, CEO of Cambridge Analytica

    Who’s who in the Cambridge Analytica scandal?

    Cambridge Analytica boss

    Cambridge Analytica CEO, Alexander Nix, was one of several senior executives filmed by an undercover reporter from Britain’s Channel 4. Nix claimed credit for Donald Trump’s 2016 electoral victory. He also said his political consultancy could feed untraceable messages on social media. Executives bragged that the firm could use misinformation, bribery and even prostitutes to help win elections.

  • Dr Aleksandr Kogan, University of Cambridge

    Who’s who in the Cambridge Analytica scandal?

    Psychology academic behind Facebook app

    A Moldovan-born Cambridge University researcher developed a personality app that harvested the personal data of 30 million Facebook users. Aleksandr Kogan said he passed the information to Cambridge Analytica, under assurances that what he was doing was legal. But now he says the research firm and Facebook are scapegoating him over the scandal.

  • Mark Zuckerberg, CEO of Facebook

    Who’s who in the Cambridge Analytica scandal?

    Facebook chief was ‘deceived’ over data use

    Facebook CEO Mark Zuckerberg was criticized for waiting for four days to respond to the scandal. His social media network claims to be the victim of the whole saga, insisting it was unaware of how the data was being used. Still, Zuckerberg has been summoned by the British and European parliaments, while US consumer regulators have launched an investigation into the firm’s use of personal data.

  • Donald Trump and Stephen Bannon

    Who’s who in the Cambridge Analytica scandal?

    Trump strategist with Cambridge links

    Trump’s former strategist Steve Bannon helped develop the populist, anti-Washington message that helped the billionaire win the White House. A founding member of right-wing outlet Breitbart News, Bannon is a former board member of Cambridge Analytica and brought in wealthy businessman Robert Mercer as a financial backer. He left the White House last August and Trump has since cut him off.

    Author: Nik Martin

nm/sms (Reuters, AFP, AP)

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