Facebook to pay $5bn as a fine for Cambridge Analytica privacy violations
Facebook will have to pay $5bn as a fine for Cambridge Analytica privacy violation, largest ever levied by the Federal Trade Commission against a technology company.
- FTC fines Facebook $5bn for Cambridge Analytics privacy violations.
- It is the largest ever levied by the Federal Trade Commission against a technology company.
- Cambridge Analytica, the political consultancy, had inappropriately acquired personal information of more than 50m Facebook users.
The Federal Trade Commission has voted in favor of fining Facebook $5bn after an investigation revealed the company’s privacy violations, which was made public after the Cambridge Analytica revelations.
Both Wall Street Journal and Washington Post cited unknown sources which were already familiar with the matter. It was reported on Friday afternoon that the settlement was approved by a vote of 3-2 that broke through party lines, Republicans voted in favor while the Democrats in the opposite. However, the justice department is expected to still make a final approval in the fine.
Federal Trade Commission (FTC) and Facebook remained quiet in the matter. The investigation by FTC was made public in March 2018, after the Guardian revealed that Cambridge Analytica, the political consultancy, had inappropriately acquired personal information of more than 50m Facebook users.
Under a 2012 consent decree birthed from a previous FTC investigation in privacy concerns, Facebook had agreed to improve the protection of the user’s privacy. The investigation was based on whether or not Facebook had violated this decree.
Largest ever imposed by FTC on a technology company:
However, the $5bn fine will be the largest ever imposed by FTC on a technology company, and also the largest ever fine against any company for violation of privacy. Facebook had said in April of this year that they were nearing the end of their negotiations with FTC and the fine would be in between $3bn and $5bn.
Due to the agreement made, Facebook will reassess ways in which it handles the data of its users but the settlement will still not stop the company’s capacity to share data with third parties, the report revealed.
Critics think that the fine will barely make a dent in Facebook’s bank account since it had over $15bn revenue in the first three months of this year alone and the changes that Facebook is being required to make aren’t significant enough.
“This isn’t a fine, it’s a favor to Facebook, a parking ticket which will clear them to conduct more illegal and invasive surveillance” – said Matt Stoller, an employee at Open Markets Institute who majors in monopoly power.
Referring to the AG (Attorney General) of Washington DC, who is pursuing a lawsuit against Facebook over this Cambridge Analytica case, Matt Stoller said that the Congress should stop funding the FTC and move that money to ‘state enforcers’ like Karl Racine.
“Congress should start defunding the FTC and move the money to state enforcers like Karl Racine who believe in enforcing the law” – he said.
The stock price of Facebook jumped more than 1%:
The investors, however, appeared to agree and the stock price of Facebook jumped more than 1% when the news broke out before the trading closed for the weekend.
“The FTC just gave Facebook 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” – the Democratic congressman who presidents the House subcommittee on antitrust issues, David Cicilline expressed on Twitter.
David Cicilline will be given the opportunity to express his concerns directly to Facebook executives when representatives of big Silicon Valley tech companies will testify at a hearing of antitrust subcommittee.
The hearing and fine come as Facebook experiences amplified scrutiny over antitrust concerns and its privacy performances. Ron Wyden, Senator of Oregon, said that the fine clearly shows that Facebook’s massive influence makes it difficult to hold accountable.
“This reported fine is a mosquito bite to a corporation the size of Facebook, and I fear it will let Facebook off the hook for more recent abuses of Americans’ data that may not have been factored into this inadequate settlement. The only way to assure Americans that our private data will be protected is to pass a strong privacy bill, like the one I plan to introduce in the coming weeks” – he said
The company will come up against more challenges in the future as it seeks to launch its new cryptocurrency ‘Libra’ in 2020. Donald Trump tweeted on Thursday that Libra will have ‘little standing or dependability’.
The House financial services committee is arranging a panel on Facebook’s plans for Libra on 17 July.
Lawmakers think that the small fine and ruling show federal privacy laws are seriously needed.
“Given Facebook’s repeated privacy violations, it is clear that fundamental structural reforms are required. With the FTC either unable or unwilling to put in place reasonable guardrails to ensure that user privacy and data are protected, it’s time for Congress to act’’- Senator Mark R Warner of Virginia stated.
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