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Cambridge Analytica: Facebook could face a billion dollar fine from the US FTC

Facebook is in talks with the US Federal Trade Commission for a settlement over privacy violations which could amount to an unspecified but record breaking multi-billion dollar fine, reports the New York Times. The talks revolve around the agency’s investigation into whether the tech giant violated an earlier 2011 settlement with the FTC (more below).

The present probe relates to an investigation the FTC launched after it emerged that Cambridge Analytica had harvested the information of 87 million people via Facebook without their consent.

In the present case

  • FTC staffers had met the commissioners in December, and found evidence of the violation of the 2011 agreement.
  • FTC staff make a formal recommendation, which then goes to vote by the agency’s commissioners. The recommendation may or may not go through, depending on the vote.
  • Some FTC officials are pushing for maximum fines citing privacy breaches by Facebook
  • The agency can impose up to $41,000 in penalty for each violation it finds

In the 2011 settlement, Facebook had promised multiple measures to protect user privacy after the agency found the company’s data collection and processing to be harmful to users. The agreement required Facebook to
a) seek users’ permission to share their data with third parties, and
b) notify the commission if a third-party misuses the data.

The agreement also tied Facebook to 20 years of privacy checkups to ensure compliance.

About a month ago, US regulators met to discuss a possible penalty against Facebook in this case, reported Washington Post. The publication added that the penalty was expected to be much heavier than the $22.5 million fine the FTC imposed on Google in 2012.

The $225 million penalty on Google, in 2012, is the heaviest fine the FTC has imposed yet, besides penalties on Volkswagen in 2016, and a $100 million fine on identity-protection company LifeLock.

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Privacy and anti-trust regulations on Facebook

Although Facebook may face its first mammoth penalty for privacy violation in the US, European countries and regulators have been investigating Facebook for a while now.

  • Earlier this month, Germany’s anti-trust regulator imposed restrictions on Facebook’s collection and processing of user data, following several years of investigation.
  • Facebook is facing 7 data probes from Ireland’s privacy regulator for breaches including Cambridge Analytica, and a bug which gave unauthorized access to users’ photos, among others. Facebook’s European headquarters are located in Ireland.
  • In October 2018, the Information Commissioner’s Office imposed a penalty of £500,000 on Facebook for two violations of the Data Protection Act.
  • In May 2017, the European Union anti-trust regulator had fined Facebook $122 million for misleading the public during its acquisition of WhatsApp. Facebook had told the European Commission that it wouldn’t combine Facebook and WhatsApp data, and yet announced only a few months later that it would do so. The regulator felt that this would give Facebook an unfair advantage over competitors, giving it unbridled access to data for online advertising.

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