The United States Federal Trade Commission has agreed to settle with tech giant Facebook for a massive $5 billion fine.
After a series of investigation on privacy and information breach against Facebook’s alleged political involvement with Cambridge Analytica, the FTC voted 3-2 to approve the settlement.
According to Data Breach Today, this fine is recorded the largest one levied to a tech company. This amount is believed to be Facebook’s profit for the first quarter of 2019. But since there is an on-going investigation, the company set aside $3 billion of this profit to settle a fine.
Major political scandal
FTC and Facebook have been negotiating for months in line with the settlement amount for the alleged involvement of the tech company with Cambridge Analytica.
The consumer protection agency began its investigation in March last year, following reports that Cambridge Analytica has accessed Facebook’s millions of user’s data. The investigation is conducted to know whether Facebook has violated the 2011 agreement where users are notified if data will be shared.
According to BBC, data of more than 87 million Facebook users were collected and used by Cambridge Analytica for political advertising purposes.
Given this issue, the FTC has increased regulations linked to the tech company’s data management practices and data privacy. The only problem is, the United States lacks federal privacy law in connection with consumer protection and deceptive practices.
Last year, senators and like Sen. Mark Warner has called out social media companies to work with Congress to discuss potential solutions surrounding privacy and data security.
Sen. Mark Warner said in a statement that, “Given Facebook’s repeated privacy violations, it is clear that fundamental structural reforms are required. 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.”
Shortly after being involved with Facebook privacy breach, Cambridge Analytica has shut down. It is also questioned for its political tactics, influencing voters with political messages. Linked with the 2016 Elections, the company even contracted several Republican presidential candidates.
The Justice Department still needs to finalize the process and work with Facebook to smoothen out the settlement. It is unclear how long this would take.
Meanwhile, Facebook’s investors ‘responded positively to the news’ which explains why shares have increased by 1.8% this week.