According to the Federal Trade Commission (FTC) in the USA, social networking company Facebook is to pay a record fine of $5bn (£4.09bn) to settle its privacy concerns.
On top of the fine, the social company must also set up an independent committee that will be in charge of privacy. Furthermore, this committee must not be under the control of Facebook’s CEO and co-founder Mark Zuckerberg.
The FTC has been probing allegations that Cambridge Analytica, the political consultancy firm, obtained the data of around 87 million users of the social platform improperly. The probe further widened to also include other privacy issues, such as facial recognition.
It is believed that the fine is the biggest ever to be imposed on any company or organisation for the violation of the privacy of its consumers. The chairman of the FTC, Joe Simons. said that Facebook undermined its consumers choices despite repeatedly promising its billions of worldwide users that it would be in control of how personal information is shared.
Simons added that the fine was so big because it wanted to ensure that Facebook would change its culture relating to privacy in order to minimise the likelihood of further violations.
The Bureau of Consumer Protection at the FTC began its investigation into Facebook back in March 2018 as news broke out of the Cambridge Analytica scandal, which saw personal data being illegally harvested from a 2014 personality quiz, which was then sold on to Cambridge Analytica.
Although around 270,000 people took part in this quiz, a whistleblower alleged that the data of more than 50 million users, mainly based in the US, was harvested without explicit consent.
There were then claims that the data may have been used in an attempt to influence both the 2016 US presidential election and the UK’s 2017 EU referendum.
Cambridge Analytica was not the only organisation that had access to the personal data, and many other developers had taken advantage of this without permission. Facebook was also penalised half a million pounds by the UK’s data protection watchdog back in October for its role in the scandal.
The FTC found that a number of Facebook policies were in violation of the rules protecting against deceptive practices, using the social site’s facial recognition tool as an example of this. It also fell afoul of regulations by not stating that phone numbers being used as part of a two-factor authentication process would be used as part of an advertising campaign.
FTC representatives from both sides of the two major US political parties, the Democrats and the Republicans, voted this settlement deal through, despite some saying the action did not go far enough.
For SMEs, a fine running into billions of pounds would be out of the question, but a 4% of turnover penalty for contravening the GDPR could be even more devastating to them than these enormous sums are to tech giants like Facebook. Make sure your site is compliant with data regulations by speaking to the Engage Web team.