Federal Trade Commission Slaps Facebook With £4bn Fine

Dominique Adams

15 July 2019, 11.06am

Critics say the fine is tantamount to a slap on the wrist and is too low to make an impact on Facebook.

The Federal Trade Commission (FTC) has fined social media platform Facebook £4 billion – a record amount of money – for its part in the Cambridge Analytica scandal.

Prior to this, the largest fine ever issued was against Google ($22.5 million) for spying on its users.

This new fine follows the FTC’s investigation into data privacy violations committed by the company. Its investigation centred around whether the company had broken a 2011 agreement, under which it was required to clearly notify users and gain “express consent” to share their data.

It is believed that the data of up to 87m users, secretly gathered via apps and games, was shared improperly by the company with Cambridge Analytica.

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The £4 billion fine is in line with the amount the company predicted it would pay in its quarterly report in April. Even though this is the largest fine ever levied on a tech company by the FTC, critics have described it as tantamount to a slap on the wrist.

Since the penalty only amounts to around one quarter of Facebook’s yearly profit, Democrats have said it is ineffectual and too low to be a deterrent. The announcement was met so positively by investors that Facebook shares rose 1.8% when the amount was revealed.

“With the FTC either unable or unwilling to put in place reasonable guardrails to ensure that user privacy and data are protected, it’s time for Congress to act,” US Senator Mark Warner said.

Equally unimpressed with the fine, David Cicilline, a Republican member of congress tweeted: “The FTC just gave Facebook a Christmas present five months early.”

Senator Elizabeth Warren commented: “Let’s be honest. This settlement is a victory for Facebook. Just look to the markets. In the first 15 minutes after the settlement was reported, Facebook’s market value went up by more than $5 billion”.

The settlement will now have to go through the approval process before it is confirmed, which means it will be reviewed by the Justice Department.