Technology Other News 14 Jul 2019 Facebook fined USD 5 ...

Facebook fined USD 5 billion for data protection lapses

AP
Published Jul 14, 2019, 2:14 am IST
Updated Jul 14, 2019, 2:54 am IST
The long-expected punishment, which Facebook is well prepared for, is unlikely to make a dent in the social media giant’s deep pockets.
The Wall Street Journal and other news outlets reported on Friday that the FTC has voted to fine Facebook for privacy violations and mishandling user data. Most of them cited an unnamed person familiar with the matter. (Photo: ANI)
 The Wall Street Journal and other news outlets reported on Friday that the FTC has voted to fine Facebook for privacy violations and mishandling user data. Most of them cited an unnamed person familiar with the matter. (Photo: ANI)

Washington: At $5 billion, the fine the FTC is about to levy on Facebook is by far the largest it’s given to a technology company, easily eclipsing the second largest, $22 million for Google in 2012.

The long-expected punishment, which Facebook is well prepared for, is unlikely to make a dent in the social media giant’s deep pockets. But it will also likely saddle the company with additional restrictions and another lengthy stretch of strict scrutiny.

 

The Wall Street Journal and other news outlets reported on Friday that the FTC has voted to fine Facebook for privacy violations and mishandling user data. Most of them cited an unnamed person familiar with the matter.

Facebook and the FTC declined to comment. The 3-2 vote broke along party lines, with Republicans in support and Democrats in Opposition to the settlement, according to the reports. The case now moves to the Justice Department’s civil division for review. It’s unclear how long the process will take, though it is likely to be approved.

A Justice Department spokeswoman declined to comment on the Facebook matter. For many companies, a $5 billion fine would be crippling. But Facebook is not most companies. It had nearly $56 billion in revenue last year. This year, analysts expect around $69 billion, according to Zacks. As a one-time expense, the company will also be able to exclude the amount from its adjusted earnings results -the profit figure that investors and financial analysts pay attention to. “This closes a dark chapter and puts it in the rearview mirror with Cambridge Analytica,” said Wedbush analyst Daniel Ives. “Investors still had lingering worries that the fine might not be approved. Now, the Street can breathe a little easier.”

Facebook has earmarked $3 billion for a potential fine and said in April it was anticipating having to pay up to $5 billion. But while Wall Street — and likely Facebook executives — may be breathing a little easier, the fine alone has not appeased Facebook critics, including privacy advocates and lawmakers.

“The reported $5 billion penalty is barely a tap on the wrist, not even a slap,” said Senator Richard Blumenthal, a Democrat from Connecticut.

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