- The Federal Trade Commission sanctioned the settlement in a 3-2 vote, with the two Democratic members of the consumer protection agency dissenting.
- Facebook has been levied with a $5 billion fine approved by US regulators to settle the probe into a social network’s privacy and data protection lapses, the Wall Street Journal reported
The Federal Trade Commission sanctioned the settlement in a 3-2 vote, with the two Democratic members of the consumer protection agency dissenting.
This deal is the largest penalty ever imposed by the FTC for privacy violations on any entity, although it needs approval from the Justice Department before it is finalized.
Although details have not yet been released, the deal will likely include restrictions on how Facebook is able to use personal data.
Charlotte Slaiman of the consumer group Public Knowledge thinks it is unlikely the restrictions will be overly harsh.
“We don’t yet know key aspects of the settlement: whether Facebook must make any changes to its business model or practices as a result,” said Charlotte Slaiman, the group’s Competition Policy Counsel.
“By itself, this fine will not be sufficient to change Facebook’s behavior.”
The outlook was more optimistic at the Centre for Democracy and Technology, whose president Nuala O’Connor said the fine underscored the importance of “data stewardship” in the digital age.
“The FTC has put all companies on notice that they must safeguard personal information,” O’Connor said.
FTC announced last year that it has reopened the investigation against Facebook in a 2011 privacy settlement after the revelation that data of 10 millions of users was breached by political consultancy Cambridge Analytica, which was working on the Donald Trump campaign in 2016.
Facebook has also faced questions about whether it improperly shared user data with business partners in violation of the earlier settlement.
The leading social network with more than two billion users worldwide has also been facing inquiries on privacy from authorities in US states and regulators around the world.
The settlement would be in line with Facebook’s estimate earlier this year when it said it expected to pay $ 3 billion to $ 5 billion for legal settlements on “user data practices.”
The fine is unlikely to hurt Facebook, which logged a profit of $ 2.4 billion in revenue that climbed 26 percent to $ 15.1 billion in the first three months of this year.
Facebook Stand on Fine
Facebook’s stock value increased by 1.8 percent after the fine was announced, closing at nearly $ 205, the highest it has been all year.
Few Facebook critics have argued that the company shall face more hard sanctions including the monitoring of its data practices, or that of CEO Mark Zuckerberg should be liable for penalties.
Faced with criticism, Facebook’s head of global affairs, Nick Clegg, called on governments to do more to regulate social networks, instead of leaving the work to companies.
Clegg mentioned, “It’s not for private companies, however big or small, to come up with those rules. It is for democratic politicians in the democratic world to do so.”
With authorities sanctioning such huge fine on facebook, certainly, the rules for data protection are gonna be strict now.