Facebook settles with FTC for record $5 billion

Facebook’s $5 billion fine doesn’t bode well for Libra

The Federal Trade Commission (FTC) in the United States has reportedly hit Facebook with a record $5 billion settlement for privacy violations, according to a story first reported by The Wall Street Journal and numerous subsequent online reports. The US Justice Department must approve the fine and it's unlikely to be reversed as US sources report fines are rarely overturned.

The investigation focused on whether Facebook had violated a 2011 agreement under which it was required to clearly notify users and gain "express consent" to share their data.

Furthermore, Facebook and the FTC stated to the media that they had no comment on the statements.

The Federal Trade Commission (FTC) is said to have made the decision following an investigation begun in March a year ago after sensational reports emerged of improper use of users' personal data.

If confirmed, it would be the largest fine ever levied by the FTC on a tech company.

Facebook generated a cool $15bn during Q1 2019 alone, topping up the $22 billion profit it made in 2018.

Investors responded absolutely to the report, propelling Facebook shares up 1.8%.

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Facebook has enjoyed more than a decade of unfettered growth as Silicon Valley's golden child, trusted to regulate itself and keep its 2.4 billion users' interests at heart.

The reported deal with Facebook would settle a number of alleged privacy violations, including the unauthorized use of Facebook data by Cambridge Analytica, to target political ads to Facebook users. To be effective, remedies must both curb Facebook's widespread data collection and promote competition.

Facebook is about to get slapped with a $5 billion fine by the Federal Trade Commission due to the Cambridge Analytica scandal, where data from over 50 million Facebook was used without permission.

As part of the House of Representatives upcoming hearing into the growing power and influence of big tech, executives from Facebook, Google, Apple and Amazon.com Inc (All Sessions) are all expected to testify.

Individuals from Congress are as of now opposing this settlement - Rep. David Cicilline is considering it a "Christmas present", while Senator Ron Wyden says the FTC has "failed hopelessly".

Think about it. If no harm was done because of Facebook's sharing of user data, the restrictions on the data sharing would be a needless cost imposed on business, with no offsetting consumer benefit.

According to the BBC, the vote "broke along party lines". "This fine is a fraction of Facebook's annual revenue". Republican commissioners voted in favour, while the Democrats opposed. The FTC has been an aggressive privacy enforcer using a statute that isn't specifically meant to protect privacy.

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