Facebook to Pay $5bn Fine Over Privacy Violations

Mark Zuckerberg

The fine is thought to be the largest fine ever imposed on a any company for violating consumers’ privacy. 

Following a year-long investigation into privacy violations related to the Cambridge Analytica scandal, the Federal Trade Commission (FTC) has ruled social media giant Facebook will pay a record-breaking  $5 billion fine for “deceiving” users about their ability to keep their personal information private.

In addition to the fine, the company must also set up an independent privacy committee that Facebook boss Mark Zuckerberg will have no control over.

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” said FTC chairman Joe Simons.

“The magnitude of the $5bn penalty and sweeping conduct relief are unprecedented in the history of the FTC,” he said.

As part of the settlement, Facebook will also put forward changes to how the company operates and will submit a modified corporate structure, designed to make its executives more accountable for users’ privacy.

Speaking of the changes, Simons said he wanted them to “change Facebook’s entire privacy culture to decrease the likelihood of continued violations”.

Zuckerberg took to his own Facebook page to again assert the company had overhauled its approach to handling users’ data. “We’ve agreed to pay a historic fine, but even more important, we’re going to make some major structural changes to how we build products and run this company,” he wrote.

“We have a responsibility to protect people’s privacy. We already work hard to live up to this responsibility, but now we’re going to set a completely new standard for our industry.

“Overall, these changes go beyond anything required under US law today. The reason I support them is that I believe they will reduce the number of mistakes we make and help us deliver stronger privacy protections for everyone.”

The FTC also announced it is taking legal action against Cambridge Analytica and has put forward potential settlements with the Alexander Nix, the company’s former CEO and its app developer Aleksandr Kogan.

To date, this is the largest fine issued by the FTC, its $275 million penalty against Equifax, had been the largest fine ever issued by the US regulator. The proceeds of the fine will not go to the users whose information was handled inappropriately, instead it will go to the US Treasury.

FTC associate director James Kohm said, “By law, this money goes to the US Treasury. There’s nothing else that can be done with the money, by law. We often use redress funds to compensate injured consumers. Occasionally we will do consumer education, but when there is a civil penalty that needs to go to the United States Treasury.”

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