Facebook Fined Whopping $5 Billion Over Privacy Breaches

John Romero | July 24, 2019
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Facebook has made history again by having, as The Hill describes, a fine "by far the highest the U.S. government has ever imposed on a technology company for privacy violations.” 

For the mishandling of data in the Cambridge Analytica scandal, the Federal Trade Commission (FTC) levied a $5 billion fine against Facebook, the agency announced Wednesday.

The FTC writes in a press release,

Facebook, Inc. will pay a record-breaking $5 billion penalty, and submit to new restrictions and a modified corporate structure that will hold the company accountable for the decisions it makes about its users’ privacy, to settle Federal Trade Commission charges that the company violated a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information.

The $5 billion penalty against Facebook is the largest ever imposed on any company for violating consumers’ privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide. It is one of the largest penalties ever assessed by the U.S. government for any violation.

The settlement order announced today also imposes unprecedented new restrictions on Facebook’s business operations and creates multiple channels of compliance. The order requires Facebook to restructure its approach to privacy from the corporate board-level down, and establishes strong new mechanisms to ensure that Facebook executives are accountable for the decisions they make about privacy, and that those decisions are subject to meaningful oversight.

As the press release states, the settlement order doesn’t stop at the $5 billion fine, as the FTC is also going to require Facebook to create a privacy committee within its board of directors to help make changes for how they handle data.

Facebook CEO Mark Zuckerburg will also be subject to further oversight from the board of directors when it comes to decision-making within and for the company. 

Zuckerburg wrote a post Wednesday saying in relation to the fine and oversight,

We expect it will take hundreds of engineers and more than a thousand people across our company to do this important work. And we expect it will take longer to build new products following this process going forward.

One interesting fact that The Hill points out is that when it came to levying the fine against Facebook, the vote on the FTC committee was 3-2, Republicans in the majority. One of the two Democrats who voted the resolution down on the committee, Commissioner Rohit Chopra, had this to say about the vote:

The settlement’s $5 billion penalty makes for a good headline, but the terms and conditions, including blanket immunity for Facebook executives and no real restraints on Facebook’s business model, do not fix the core problems that led to these violations.

The new oversight will come in the form of a third-party audit on their handling of data for the next 20 years. Facebook isn't out of the woods yet as they could face another billion-dollar fine from the European Union for their handling of data and multiple breaches reported.