Facebook to pay record $5 bn US fine over privacy

WASHINGTON: Facebook Inc will pay a record-breaking $5 billion fine to resolve a government probe into its privacy practices and will boost safeguards on user data, the US Federal Trade Commission and the social media company said.
After the stock market closed, Facebook disclosed as a part of its earnings report that the FTC told it last month that the commission had opened a separate antitrust investigation of the company. The FTC, which early in the day issued a statement and held a press conference about the privacy settlement, did not mention an antitrust probe.
The FTC probe that resulted in the $5 billion settlement uncovered a wide range of privacy issues. It was triggered last year by allegations that Facebook violated a 2012 consent decree by inappropriately sharing information belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica. The consultancy’s clients included President Donald Trump’s 2016 election campaign.
The FTC voted 3-2 to adopt the settlement, which the three Republican commissioners called the settlement “a complete home run” that exceeded any possible court award. Both Democratic commissioners said it did not go far enough or require a large enough fine. The settlement requires court approval.
Republican FTC Chairman Joe Simons stressed the FTC’s limited authority and desire to avoid a long court fight. “Would it have been nice to get more, to get $10 billion, instead of $5 billion for example, to get greater restrictions on how Facebook collects uses and shares data?” he asked at a press conference. “We did not have those options. We cannot impose such things by our own fiat.”
Democratic FTC Commissioner Rohit Chopra complained that the penalty provided “blanket immunity” for Facebook executives “and no real restraints on Facebook’s business model” and does “not fix the core problems that led to these violations” or limit Facebook’s ability to collect data.
Facebook confirmed it would pay the $5 billion fine and said the settlement would provide “a comprehensive new framework for protecting people’s privacy.” Its shares closed about 1 per cent higher. The Securities and Exchange Commission (SEC) said Facebook agreed to pay an additional $100 million to settle allegations that it misled investors about the seriousness of its misuse of users’ data.
Under the settlement, Facebook’s board will create an independent privacy committee that removes “unfettered control by Facebook CEO Mark Zuckerberg over decisions affecting user privacy.” Facebook also agreed to exercise greater oversight over third-party apps, and said it was ending access to friend data for Microsoft Corp and Sony Corp. — Reuters