Facebook Negotiates a Record, Multi-Billion Dollar Fine with the US Government

Feb 18, 2019
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Facebook has been dealing with the privacy activists, user backlash and then the government pressure since the Cambridge Analytica scandal came to the front last year. Going from denial to admission to trying to fix the issue, the company is yet to be slapped with a penalty by the US government. The issue at heart is the social network’s settlement with the Federal Trade Commission (FTC) that prohibits Facebook from misrepresenting security of user data.

The settlement required Facebook to receive user consent before sharing their data or making changes to it. The company had also agreed to audits for the next 20 years. Since March 2018, when it was revealed that data of up to 87 million of Facebook users was shared with a political consulting firm, Cambridge Analytica, through exploiting the “friends of friends” feature, the agency has been investigating the company’s role in this privacy breach.

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It appears the two are negotiating a deal that could see the FTC impose the largest fine ever on a technology company. Facebook denies 2011 settlement violations, but if negotiations fail, the FTC could take the matter to court, the WaPo reported last week. Some suggest that the company is looking at a fine exceeding $2 billion. In comparison, the largest ever fine on a tech company has been imposed on Google when it agreed to pay $22.5 million in a Safari-related privacy case.

Facebook penalty would pave way for the FTC to regulate Silicon Valley companies

While the investigation may have started with Cambridge Analytica, since then we have seen a number of privacy breaches and data disasters coming to the front. Storing never-posted photos; turning private posts public of over 14 million users; sharing private messages with other tech companies, and personality quizzes sharing and selling data of millions of Facebook users are only some of the cases that have been revealed since the March 2018 Cambridge Analytica scandal.

Privacy activists have been asking the FTC to go for a significant penalty that could show that the regulator is serious about enforcing consent agreements. If the FTC does manage to impose a billion-dollar penalty, it would open its ways to monitor and investigate Silicon Valley companies that have often managed to avoid privacy-related issues with half-hearted apologies and some pennies.

The fine could theoretically go as high as $70 billion based on Facebook’s repeated violations, the Electronic Privacy Information Center (EPIC), Common Sense Media, and other groups told the agency last month in a letter. However, comparing the fine imposed on Google for its Safari hack, the letter [PDF] said that the fine against Facebook should at least exceed $2 billion. The letter issued by these consumer groups also urged the Commission to regulate Facebook as a public utility.

“Facebook has operated for too long with too little democratic accountability,” the letter reads. “That should now end.”

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