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Facebook slammed with $5b fine over privacy breaches

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The Federal Trade Commission of EE. UU He has criticized Facebook Inc with a fine of $ 5 billion, after his investigation into the handling of user data by the social media company, according to several sources familiar with the situation.

The FTC has been investigating allegations that Facebook inappropriately shared information belonging to 87 million users with the now-defunct British policy consultancy Cambridge Analytica.

The investigation focused on whether the data exchange violated a 2011 consent agreement between Facebook and the regulator.

Investors applauded the news of the deal and increased Facebook shares by 1.8%, while several influential Democratic lawmakers in Washington condemned the proposed penalty as inadequate.

The FTC is expected to include other restrictions in the agreement on how Facebook treats user privacy, according to the Wall Street Journal, which also said that the agency’s vote was in line with the parties,

with three Republicans voting. To approve it and two opposing democrats. The agreement would be the most significant civil penalty paid to the agency.

The FTC and Facebook declined to comment. Rep. David Cicilline, a Democrat, and president of a congressional antitrust panel called the $ 5 billion fine “a Christmas gift five months earlier.”

“This fine is a fraction of Facebook’s annual revenue; it will not make them think twice about their responsibility to protect the user’s data,” he said.

Facebook’s revenues for the first quarter of this year were $ 15.1 billion, while its net income was $ 2.43 billion. It would have been higher, but Facebook reserved $ 3 billion for the FTC fine.

While the deal resolves a major regulatory headache for Facebook, the Silicon Valley firm still faces more potential antitrust testing, as the FTC and the Justice Department conduct a broad review of competition among the largest technology companies in the US. UU

He also faces public criticism from President Donald Trump and others about his Libra cryptocurrency plan for concerns over privacy and money laundering.

Cambridge Analytica’s errors, as well as anger over hate speech and misinformation on its platform, have also generated calls from people ranging from presidential

candidate Senator Elizabeth Warren to Facebook co-founder Chris Hughes. For the government to force the social media giant. To sell Instagram, which he bought in 2012, and WhatsApp, bought in 2014.

But the company’s core business has proved resilient, as Facebook exceeded earnings estimates in the last two quarters.

While the details of the agreement are unknown, in a letter to the FTC earlier this year, Senators Richard Blumenthal, a Democrat, and Josh Hawley, a Republican,

told the agency that even a civil penalty of $ 5 billion It was too small and that the top officials potentially included the founder Mark Zuckerberg, should be personally responsible.

FTC Commissioner Rohit Chopra, a Democrat, has said the agency should hold executives accountable for violations of consent decrees if they participate in the violations. Chopra did not respond to requests for comments on Friday.

The agreement has yet to be finalized by the Civil Division of the Justice Department, and a final announcement could come as early as next week, the source said.

An informed source on deal negotiations had told Reuters in May that any agreement would put Facebook under 20 years of supervision.