The FTC approves $5B penalty against FB

Jeannie Matthews
July 16, 2019

Facebook is set to be fined $5 billion by the Federal Trade Commission, the U.S. competition watchdog, according to reports from the Wall Street Journal and the Washington Post. The 3-2 vote broke along party lines, with Republicans in support and Democrats in opposition to the settlement, according to the reports.

After the news past year that political data consulting firm Cambridge Analytica accessed the personal information of up to 87 million Facebook users without their explicit consent, the FTC opened an investigation into whether the Silicon Valley tech giant had violated a 2011 settlement regarding its privacy practices.

In a surprising twist, Facebook's stock value actually rose by 1% following the news of the FTC's landmark fine - and Facebook CEO Mark Zuckerberg owns a whopping 88.1% of Facebook's shares.

Activists and Democratic lawmakers blasted the Federal Trade Commission's $5 billion fine against Facebook as "chump change" and lambasted the agency's settlement as toothless.

The watchdog's probe has largely focused on whether the sharing of users' data violated a 2011 agreement between the regulator and the company, in which Facebook had promised not to share users' data with third parties without their knowledge and consent.

If this really pulls through, it would mean the biggest fine the FTC has ever imposed on any tech company.

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The outlook was more optimistic at the Center for Democracy and Technology, whose president Nuala O'Connor said the fine underscored the importance of "data stewardship" in the digital age.

Seven years prior, Facebook had reached a settlement with the FTC after it was accused of making data public that it had promised would be private.

"Given Facebook's repeated privacy violations, it is clear that fundamental structural reforms are required", Sen.

The settlement is expected to include limits on how Facebook treats user privacy.

Meanwhile, Sen. Richard Blumenthal, D-Conn., blasted Facebook's entire business model and called for congressional hearings into the FTC's actions in a series of tweets. The stock is up more than 50 percent since the beginning of the year. "That said, this reported fine is a mosquito bite to a corporation the size of Facebook".

Representative David Cicilline, who chairs the House's Antitrust Subcommittee, likewise had scathing remarks in regards to the FTC settlement. Of course Democrat politicians have criticised the decision, but many more independent commentators have noted that the fine amounts to less than a quarter's profit for the social media giant. This includes almost a dozen by the Irish Data Protection Commissioner, which oversees privacy regulation in the European Union.

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