The US Federal Trades Commission (FTC) is set to announce that Facebook has agreed to pay the fine of $5 billion imposed on it and set up a board committee on privacy, reports Reuters. Mark Zuckerberg will also have to reportedly certify every three months that his company is safeguarding user privacy. The FTC will also likely allege Facebook of not providing sufficient information to about 30 million users about a facial recognition tool. According to another report, the Securities and Exchange Commission (SEC) is also expected to announce a settlement with Facebook for around $100 million over allegations that it didn’t disclose risks to investors over its privacy practices. Also note that creating new privacy positions within the company as part of the settlement with the FTC was something that we had earlier reported in May.
FTC’s fine has faced criticism
This fine will mark the largest civil penalty ever paid to the FTC. It began its investigation into Facebook in March 2018, after it was revealed that Cambridge Analytica, a political consulting firm, harvested and used the personal data of around 87 million of Facebook users, including 562,455 Indian users, without their consent ahead of the 2016 US Presidential election. This, according to the FTC was a violation of the 2011 consent decree the company had signed with it. However, several people have highlighted that this will hardly ruffle Facebook’s feathers. Facebook made $15 billion in revenue and $2.4 billion in profits in just the first three months of 2019, and earned $22.1 billion in profits last year.
Not the end of regulatory scrutiny for Facebook
These settlements with the FTC and SEC wouldn’t mark the end of regulatory probes on Facebook. We reported this morning that US Justice Department is opening a broad investigation of online technology companies including Facebook to review if they engage in practices that reduce competition, stifle innovation or harm consumers. Lawmakers in the US are also scrutinising Facebook’s cryptocurrency venture Libra.
Child rights’ advocates and other consumer groups in the US have urged the FTC to investigate whether Facebook violated federal laws by allegedly fooling kids into spending their parents’ money on online gaming. The complaint alleged that Facebook enabled “friendly fraud” by encouraging game developers to allow kids spend their parents’ money without their consent.