Facebook Set For Record $5bn FTC Fine

Written by

Facebook is reportedly set to be handed a record $5bn fine by a US regulator over privacy violations leading to the Cambridge Analytica scandal.

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

It turned out that the shadowy consultancy had managed to obtain data collected by a third-party app on 87m Facebook users and their friends and use it to profile and target wavering voters ahead of the 2016 Presidential election.

When it levied a maximum £500,000 fine under the pre-GDPR data protection regime last October, the UK’s Information Commissioner’s Office (ICO) argued that Facebook had processed user information “unfairly” by allowing developers to access this data without adequately “clear and informed consent.” It also criticized the social network for allowing developers to access the personal data of users who had not even downloaded the app but were friends of those who had.

The $5bn fine is unlikely to trouble a firm that made over $15bn in the first three months of 2019 alone, but it is believed to be the largest ever levied by the FTC against a tech firm and for privacy violations.

It is also around the amount Facebook predicted it would be fined a few months ago, according to Dan Goldstein, former attorney and owner of digital marketing agency, Page 1 Solutions.

"The real ‘teeth’ of this announcement will come not from the $5 billion settlement. Facebook is worth hundreds of billions of dollars, so this amount is practically a drop in the bucket. I am more curious about the regulations expected to accompany the terms of the settlement," he argued.

"If the financial losses don't paint a clear enough picture for the tech industry as a whole, perhaps new regulations for one of its key players will finally convince these companies to begin protecting users instead of exploiting them.”

Regulators outside the US are already coming down hard on data protection and privacy violations. Last week the ICO issued to huge fines to BA and Marriott International for cybersecurity failings that led to massive data breaches at their respective organizations.

What’s hot on Infosecurity Magazine?