Facebook To Pay Record-Breaking $5 Billion Fine Over Privacy Lapse
Facebook is in the news over its decisions affecting user’s privacy every now and then. The Federal Trade Commission (FTC) of the United States has slapped a penalty of $5 billion on the social media giant for violating consumer’s privacy rights. Facebook will pay a record-breaking fine to resolve the government probe, which is to assess the largest penalty ever for any violation.
The FTC probe that resulted in the $5 billion settlement found Facebook’s data policy to be deceptive to “tens of millions” of people who used the Facebook facial recognition tool. Additionally, Facebook also violated its own rules when it did not disclose phone numbers cached to make a security feature work. This security feature was to be used for advertising. The billion-dollar fine imposed on Facebook is approximately 9 per cent of the company’s 2018 revenue.
Facebook confirmed it would pay the fine and said that the settlement would provide, “a comprehensive new framework for protecting people’s privacy.” The Securities and Exchange Commission (SEC) said Facebook agreed to pay additional $100 million to settle allegations that it misled investors about the gravity of its misuse of users’ data. After the stock market shut, Facebook’s shares closed at 1 per cent.
The FTC started scrutinizing Facebook in March 2018 after the now-defunct British consulting firm Cambridge Analytica was in the news for accessing data of 87 million Facebook users without authorization. According to the terms of a previous agreement, the social media giant was required to give its users clear notifications as to when their data was being shared by third-party apps. The agency was concerned that Facebook is infringing the agreement and ultimately levied the record fine.
Under the current settlement, Facebook’ board will form an independent privacy committee that removes, “unfettered control by Facebook,” as per CEO Mark Zuckerberg.
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