US Regulator Slaps Record $5bn Fine On Facebook Over Cambridge Analytica Issue

Following an investigation the Cambridge Analytica data breach related to Facebook which lasted for a year, concluded that the social media company had ‘deceived’ its users about their ability to keep personal information private and hence imposed a penalty of $5bn on Facebook.

A lawsuit against Cambridge Analytica was also announced by the United States Federal Trade Commission (FTC), the US consumer regulator. It also proposed settlements of the charges with the former data analysis company’s former chief executive Alexander Nix and its app developer Aleksandr Kogan.

It was just a few days ago that a record fine of $275m was slapped by the FTC on the consumer credit agency Equifax over charges of violation of consumers’ privacy and the penalty against Facebook is many times more than that record amount.

The penalty handed down to Equifax was the among the largest ever regulatory fines imposed by the US government on any company which highlighted the extent of the breach.

The fine imposed on Facebook was not unanimously agreed to by all of the FTC’s members. The fine was termed as insufficient by the two Democrats on the five member commission and added that it would not be merely enough for the social media company to bring any changes in its business practices.

“The settlement imposes no meaningful changes to the company’s structure or financial incentives, which led to these violations,” commissioner Rohit Chopra said in a statement. “Nor does it include any restrictions on the company’s mass surveillance or advertising tactics.”

“Rather than accepting this settlement, I believe we should have initiated litigation against Facebook and its CEO Mark Zuckerberg,” said commissioner Rebecca Kelly Slaughter.

In order to ensure that the executives of Facebook are more accountable for users’ privacy, the company has modified corporate structure and it will also have to follow the new restrictions imposed on it about the manner in which it operates.

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” the FTC chairman, Joe Simons, said. “The magnitude of the $5bn penalty and sweeping conduct relief are unprecedented in the history of the FTC.”

About 185 million people in the US and Canada use Facebook each day and the executives of the company would become more accountable protecting the privacy of those users because of the changes brought in Facebook’s corporate structure, Simons said.

This was intended to “change Facebook’s entire privacy culture to decrease the likelihood of continued violations”, he said.

Facebook has completely changed the manner of handling users’ information, said Mark Zuckerberg, the founder and chief executive of the social media site, in a post on his own Facebook page. “We’ve agreed to pay a historic fine, but even more important, we’re going to make some major structural changes to how we build products and run this company,” he wrote.

“We have a responsibility to protect people’s privacy. We already work hard to live up to this responsibility, but now we’re going to set a completely new standard for our industry.”

(Adapted from

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