FTC Fines Facebook With a Record-Breaking $5 Billion
Last updated July 12, 2021
- FTC will reportedly fine Facebook with a record-breaking $5 billion, after reaching a settlement with the company.
- The fine may be the largest ever, but for Facebook, it’s just a small part of its yearly profits.
- Facebook’s value raised quickly following the news, as investors see it as a case of steering free from a dangerous cape.
As reported by the Wall Street Journal, the US Federal Trade Commission has reached a settlement agreement with Facebook, and the final amount of the fine that will be imposed to the social media giant is $5 billion. The reason for the fine, for those who have been living under a rock, is the multiple user privacy violations. These were the direct result of Facebook’s irresponsible user data handling, which in some cases passed the line of being careless and entered the realm of purposeful and deliberate information sharing with numerous other parties and companies.
While the report of the WSJ hasn’t been officially confirmed by Facebook or the FTC, other reliable news outlets have crosschecked it, so we are reproducing the story with relative certainty. Apparently, this record-breaking fine will cover the Cambridge Analytica scandal, and all of the subsequent user data leaks and scandals that kept on coming, almost on a weekly basis. So, is the $5 billion fine enough to really hurt Facebook and act as a conformational factor for the future, or is this just a case of slapping their wrist?
As most would agree after looking into the social media giant’s financial figures, this is probably the latter. Lawmakers and privacy advocates criticize FTC for their decision to reach such a settlement with Facebook, as the imposed fine is only about 23% of the company’s last year’s profits. Even FTC’s commissioners weren’t in complete unanimity, as the agreement passed with 3 to 2 votes in favor. The main element that shows how poor this decision was, is the fact that Facebook’s share value immediately went up, with the investors welcoming this development with contentedness and even relief.
image source:bloomberg.com
Still, and according to what is known so far, the FTC is considering the amount of the fine right now, so even if a deal was indeed reached, the backlash from the public may lead the commission to reconsider, if that is at all possible right now. Another part of the settlement that is described by the WSJ is one that compels Facebook to document how exactly it uses the data it collects, and how they protect the privacy of its users. Will that be enough to increase the levels of privacy protection for Facebook users? That’s very doubtful, as merely documenting practices means nothing on its own. Will Facebook stop collecting and sharing user data for the purpose of targeted ad serving? That’s even more improbable, as this is where the money comes from for the social media platform.
All in all, if FTC imposes the record-breaking fine of $5 billion to Facebook, it will be a complete failure of the national regulator to force the tech behemoth to behave, and another example of why people don’t expect politicians and user data protection commissions to do something about the problem anymore.
How much money should Facebook have to pay in your opinion for the fine to be considered a real punishment to them? Let us know of your opinion in the comments section down below, or on our socials, on Facebook and Twitter.
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