- Jul 31, 2021
An extensive investigation into Facebook’s privacy practices has led to the Federal Trade Commission vote on fining the social network company a hefty $5 billion.
The Wall Street Journal, in an article dated July 12, reported that
The Federal Trade Commission has endorsed a roughly $5 billion settlement with Facebook Inc. over a long-running probe into the tech giant’s privacy missteps, according to people familiar with the matter.
The settlement has not been finalized as of yet, but no technology company has had to pay such a large fine ever. Google had paid a fine of $22.5 million in 2012 for misrepresenting privacy assurances to users of Apple’s Safari internet browser.
However, Facebook had earned more than $15 billion in revenue last quarter alone, so a fine of roughly $5 billion would probably not have as serious an impact on the multibillion-dollar earning company.
Facebook itself had reportedly expected a fine of $3 to $5 billion as a result of this investigation. What’s more, the company’s stock rose immediately after the news of the settlement was released.
However, the FTC might impose such terms as part of the settlement that might have serious consequences for the social network.
According to the Wall Street Journal report,
“a settlement is expected to include other government restrictions on how Facebook treats user privacy.”
The terms of the final agreement have not yet been released. Whether CEO Mark Zuckerberg would be held personally accountable for Facebook’s privacy violation or would have to appoint a “federally approved privacy official” or even gain the approval of FTC before launching new products, remains to be known.