FTC to fine Facebook $5 billion for Cambridge Analytica privacy violations
The Federal Trade Commission has voted to hit Facebook with a $5 billion fine for privacy violations relating to the Cambridge Analytica scandal. While this is the largest fine ever handed out by the FTC, the impact on Facebook's coffers is going to be minimal; this is how much revenue the company generates in a month.
Although the fine has not been officially confirmed -- and neither the FTC nor Facebook are commenting on the matter -- a Friday vote on the fine is said to have gone 3-2 in favor of approving it. The size of the penalty has been described variously as a "parking ticket" and "barely a tap on the wrist". Democrat Senator Ron Wyden reacted by saying: "No level of corporate fine can replace the necessity to hold Mark Zuckerberg personally responsible for the flagrant, repeated violations of Americans' privacy".
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News of the fine was broken by the Wall Street Journal which points out that the vote was predictably split along party lines -- Democrats voting against the settlement, Republicans for.
The Cambridge Analytica scandal was brought to light by the Guardian which found that the firm had improperly gathered information about over 50 million Facebook users. This led to an investigation by the FTC, and the size of the fine -- which still needs to be approved by the Justice Department -- is very much in line with what was expected. Facebook is thought to have already set aside $3 billion in preparation.
The fine is not the end of the story. As part of the settlement, the WSJ reports that it is also "expected to include other government restrictions on how Facebook treats user privacy".
For now, though, it is certainly the fine that will grab most people's attention. Reaction has been critical. In a statement, Democrat Senator Richard Blumenthal said:
This reported $5 billion penalty is barely a tap on the wrist, not even a slap. Such a financial punishment for purposeful, blatant illegality is chump change for a company that makes tens of billions of dollars every year. Will Facebook be compelled to alter its present, systematic abuse of privacy? Based on the reported settlement, the answer is sadly, no.
The FTC has been criticized for failing to take sufficient action against Facebook and Mark Zuckerburg, and there have been calls for Congress to take steps to protect user privacy.