Media reports in the United States claim that a record fine of $5 billion on Facebook was approved by the regulators of the country in pursuit of settlement of an investigation that was being conducted against the social media platform over alleged violation of data privacy.
The case relate to the data of up to 87 million Facebook users that was allegedly obtained illegally in violation of data regulations by the United Kingdom based, now defunct, political consultancy firm Cambridge Analytica. The allegations had been probed by the Federal Trade Commission (FTC) of the US.
After the revelation in the media about Cambridge Analytica having managed to gain access to the data of tens of millions of Facebook users, the US consumer protection agency – the FTC, had initiated the investigations against the company in March 2018.
The aim of the investigations was to ascertain whether a 2011 agreement – that mandated that the social media company had to clearly notify users and gain their “express consent” in order to share their data, had been violated by Facebook.
According to reports, the FTC approved the $5 billion fine in a 3-2 vote that saw division along party lines with Republican commissioners coming out in favour while Democrats opposing the deal. The Democrats wanted stricter limits on the firm and some other Democrats have criticised the fine as inadequate, claimed a report published in The New York Times.
“With the FTC either unable or unwilling to put in place reasonable guardrails to ensure that user privacy and data are protected, it’s time for Congress to act,” US Senator Mark Warner said according to the newspaper report. .
Other reports also said that the civil division of the US Justice Department now has to finalize the deal and the time frame required for that process is not clear yet. The reports however confirmed that the fine imposed on Facebook would be the largest ever on any tech company imposed by the FTC.
The amount of fine however is the same as had been predicted earlier in the year by Facebook when it had announced that it expected to be facing a fine of about $5 billion.
The settlement news was accepted positively by investors as the share price of the largest social media company went up by 1.8 per cent.
This settlement fine amount was not unexpected by Facebook as it had informed its investors in April this year that the company had apportioned a large portion of the money already which means that the fine would not dent any significant blow to the financial results of the company.
However whether Facebook would be imposed any form of additional measures is something that is not clear yet. According to experts, such measures can include enhanced regulatory oversight of the company over privacy or whether there would be any personal repercussions of the measures on the CEO of the company Mark Zuckerberg.
According to analysts, this settlement amount is just about one fourth of the average annual profits of the company and therefore is a very light reprimand for a violation that had far reaching consequences.
(Adapted from BBC.com)