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Facebook will pay a record $5bn fine to settle privacy concerns, the US Federal Trade Commission (FTC) has said.

The social network must also establish an independent privacy committee that Facebook’s chief executive Mark Zuckerberg will not have control over.

The FTC had been probing allegations political consultancy Cambridge Analytica improperly obtained the data of up to 87 million Facebook users.

The probe then widened to include other issues such as facial recognition.

The $5bn fine is believed to be the biggest ever imposed on any company for violating consumers’ privacy.

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” said FTC chairman Joe Simons.

He added that the heavy fine was designed “to change Facebook’s entire privacy culture to decrease the likelihood of continued violations”.

Facebook’s financial results reported on Wednesday did not reflect any move by customers to shun the network over privacy concerns. It said monthly active users had risen 8% in the second quarter. Revenues, mainly advertising sales, rose by 28%, beating analysts’ forecasts.

The FTC’s Bureau of Consumer Protection began investigating Facebook in March 2018 after it was revealed that personal data was illegally harvested from an online personality quiz and sold to Cambridge Analytica, a data analytics firm.

There were subsequent claims the data may have been used to try and influence the outcome of the 2016 US presidential election and the UK Brexit referendum.

Although only 270,000 people took the quiz, whistleblower Christopher Wylie alleges that the data of some 50 million users, mainly in the US, was harvested without their explicit consent via their friend networks.

At the same time that the FTC made its announcement, the US Securities and Exchange Commission (SEC) announced charges against Facebook for making misleading disclosures regarding its handling of user data.

As a result, Facebook has agreed to pay $100m to settle the claims.

The SEC found that although Facebook discovered the misuse of its users’ information in 2015, it did not clarify this for two years, instead telling investors that user data “may” have been improperly accessed.

The US Department of Justice (DoJ) is also investigating leading online platforms to see whether they are unfairly restricting competition.

The DoJ did not name any firms, but giants such as Facebook, Google, Amazon and Apple are likely to be scrutinised in the wide-ranging probe.

Source; BBC News

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