A record fine of five billion dollars to Facebook
|A record fine of five billion dollars to Facebook|
The U.S. federal regulatory authority has approved a record $ 5 billion fine for Facebook as part of an investigation into data privacy breaches, U.S. media reported.
The US Federal Trade Commission (FTC) investigated allegations that the political consulting firm Cambridge Analytica illegally obtained data from about 87 million Facebook users.
It is the largest fine awarded to one technology company and far overshadows the second largest fine of $ 22 million awarded to Google in 2012.
Facebook is well prepared for this long-awaited punishment and is not expected to hit the deep pockets of this media giant much. However, this will also burden the company with additional restrictions and a long period of strict supervision.
According to numerous media reports, yesterday the FTC voted to punish Facebook for violating privacy and misusing user data. Most media refer to unnamed persons familiar with the subject.
The commission voted with three votes in favor and two against, and it was divided along party lines, Republicans voted for, and Democrats were against, reports report.
The case is now being filed with the Civil Department of the Ministry of Justice for an audit. It is not known how long the process will take but the measure is expected to be approved.
For many companies, a fine of five billion dollars would be a heavy blow, but Facebook is not like most companies. Facebook had revenues of almost $ 56 billion last year, and analysts expect about $ 69 billion this year.
As a one-time expense, companies will be able to exclude that amount from adjusted earnings results, profit data that investors and financial analysts pay attention to.
“This closes the dark chapter and puts the story with the Cambridge analyst behind us. Investors were still worried that the fine would not be approved, and now Wall Street can breathe a little easier, “said Daniel Ives, an analyst at Wedbush.
Facebook has set aside $ 3 billion for a possible fine, and in April the company said it predicts it may have to pay up to $ 5 billion.
The FTC began investigating Facebook in March 2018 after a report that Cambridge Analytics had access to the data of tens of millions of users of that social network.
The investigation was focused on whether Facebook violated the 2011 agreement, according to which it was obliged to clearly inform users and get explicit consent to share their data.
It is not yet known whether additional measures will be taken against the company, such as increased supervision of privacy protection, or whether there will be any personal consequences for the company’s CEO Mark Zuckerberg, according to the BBC.