Published: Sat, July 13, 2019
Finance | By Loren Pratt

$5 bn US fine set for Facebook on privacy probe

$5 bn US fine set for Facebook on privacy probe

Facebook has earmarked $3 billion for a potential fine and said in April it was anticipating having to pay up to $5 billion. It wanted to assess how the company is treating the personal data of its billions of users (one of many issues that has led to increasing calls for Facebook to be broken up).

It remains to be seen whether or not this $5 billion hit will be enough to convince Facebook to change its ways, but given that the company's business model largely relies on user data, one probably shouldn't expect massive adjustments to occur any time soon. While the cause of ... In 2018, Facebook was accused of running roughshod over that pact by allowing Cambridge Analytica to surreptitiously harvest the personal information of millions of people. Allegedly, this data was used to help sway the 2016 USA presidential election.

The divide between Republicans and Democrats on the matter was irked in large by the latter pushing for tougher oversight of Facebook in addition to the fine.

Facebook's settlement will now proceed to the Justice Department, which will review the FTC's decision and either sustain or challenge it.

The FTC has been looking into whether Facebook violated a legal agreement it had with the USA government to keep its users' data private.

Facebook stock ended Friday up almost 2% after the Journal report was released.

The FTC and Facebook declined to comment.

The final settlement is supposedly directly related to a scandal involving London-Based Cambridge Analytica as well as a series of leaks of app users private records onto a public database, which is prohibited by Facebook's own policies.

The agency's previous record fine in a privacy action came in 2012, when Alphabet Inc.'s Google paid $22.5 million to settle claims it misrepresented its privacy assurances to Apple Inc.'s Safari users.

Since the Cambridge Analytica debacle erupted more than a year ago and prompted the FTC investigation, Facebook has vowed to do a better job corralling its users' data. Washington DC, New York and other states are suing the company over its numerous privacy lapses, including the data-sharing deals and unauthorized hoarding of users' email address books, and several members of Congress, including Josh Hawley (R-Missouri) and Mark Warner (D-Virginia), have proposed legislation to rein in Big Tech abuses. Facebook's shares closed at $204.87 on Friday and added 24 cents after hours.

Wall Street appeared unfazed at the prospect of the fine. For the first quarter of 2019, Facebook reported $15.08 billion in sales.

Facebook's legal troubles are far from over, though.

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