Published on July 13th, 2019 📆 | 7628 Views ⚑
0Facebook $5 billion US settlement approved to resolve Cambridge Analytica data breach
US officials approved a record $5 billion (Dh18.3bn) privacy settlement with Facebook to resolve the Cambridge Analytica data scandal, people said, prompting an immediate outcry from lawmakers and privacy advocates who said it didnât go far enough.
Although details of the settlement with the US Federal Trade Commission werenât announced, the fine is steep but far from devastating for Facebook. The company, which reported revenue of almost $56bn in 2018, had set aside $3bn in anticipation of the fine.
âThis reported $5bn penalty is barely a tap on the wrist, not even a slap,â said senator Richard Blumenthal, a Connecticut democrat, who called for a hearing on the agreement. âSuch a financial punishment for purposeful, blatant illegality is chump change for a company that makes tens of billions of dollars every year,â Mr Blumenthal said.
The FTCâs settlement was approved by a vote of 3-2, according to two people who asked not to be named because they werenât authorised to speak publicly about the decision. The agreement still needs approval from the Justice Department.
The resolution caps a probe that opened in March 2018 after news that Cambridge Analytica, a consulting firm hired by President Donald Trumpâs campaign, obtained user data from a researcher who created a personality quiz app on the social network.
The settlement is the largest privacy fine in the FTCâs history and also marks the most significant action yet against Facebook over a series of mishaps that have compromised usersâ data and sent the company reeling from one crisis to another. The agencyâs two democratic commissioners, Rebecca Kelly Slaughter and Rohit Chopra, voted against it, according to one of the people.
Ms Slaughter, Ms Chopra, Facebook and the FTC declined to comment.
Democratic senators Ron Wyden of Oregon and Mark Warner of Virginia also criticised the settlement, as did US House of Representatives antitrust subcommittee chairman David Cicilline, a Rhode Island democrat who is conducting an antitrust investigation of Facebook and other technology giants.
Something clearly has to be done to strengthen the data protection practices of that company.
Marc Rotenberg, Electronic Privacy Information Center
The job of defending the settlement will fall to FTC chairman Joe Simons, who has tried to avoid split enforcement decisions as head of the agency.
While Facebook had agreed to give its board oversight of its privacy policies, chief executive Mark Zuckerberg is the controlling board member with nearly 58 per cent of the voting power. The board also includes Facebookâs other top executive, chief operating officer Sheryl Sandberg. The two already have power over the companyâs privacy policies.
Public interest groups including Public Knowledge, Public Citizen and the Open Markets Institute said any deal with the FTC should impose remedies that would rein in Facebookâs data collection practices in addition to a fine.
âSomething clearly has to be done to strengthen the data protection practices of that company,â said Marc Rotenberg, president of the Electronic Privacy Information Center, which filed a complaint against Facebook that led to the FTCâs 2011 consent decree with the social-media company that addressed a litany of deceptive practices.
Tech industry group NetChoice praised the fine, saying it would motivate companies to improve their privacy practices.
The Cambridge Analytica incident stems from a personality-quiz app offered to Facebook users by a Cambridge University researcher. About 270,000 people downloaded the app, allowing the researcher to access data about those individuals and their friends. The information was subsequently sold to Cambridge Analytica.
Even as it resolves the FTC privacy inquiry, Facebook is still grappling with regulatory scrutiny on several other fronts - including the prospect of a new investigation by the FTCâs antitrust section under an agreement with the Justice Department that divided oversight of four of the biggest tech companies. One area of focus is likely to be the companyâs acquisitions of the photo-sharing app Instagram and the Whatsapp messaging service.
Elsewhere in the US, the Justice Department and the Securities and Exchange Commission opened investigations related to the Cambridge Analytica scandal. Separately, the attorney general for Washington, DC, has sued the company, claiming it failed to safeguard usersâ data. Other state attorneys general are also investigating.
Facebook declined to comment on the status of those probes.
The settlement ranks among the highest at the FTC, which reached a $10bn settlement with Volkswagen in 2016 for deceptive advertising in the emission-cheating scandal involving diesel models. The agencyâs previous record fine in a privacy action came in 2012, when Alphabetâs Google paid $22.5 million to settle claims it misrepresented its privacy assurances to Appleâs Safari users.
Updated: July 13, 2019 10:10 AM
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