WHAT’S BEING CLAIMED:
- Facebook settles a data breach dispute with the FTC by agreeing to pay a $5B penalty, the highest than all other previous record-breaking disputes of this kind.
- However, the settlement was opposed by Democratic FTC Commissioners who argued that accepting a settlement only provides FB and its executives ‘blanket immunity’.
- In addition, the Democrats said that there were no solid restrictions presented regarding the company’s collection and use of users’ information.
The deal stems from the company’s alleged sharing of information of 87 million users without their knowledge, during its work with the now-defunct British political consulting firm Cambridge Analytica, which bought the data from an app developer who FB had sold it to.
The breach provoked public outcry and widespread concerns over how much information was sold.
The FTC said in a statement that Facebook’s data blueprint misled ‘tens of millions’ of people who used its facial recognition tool. Additionally, the company even defied its policies against fraudulent practices when it failed to divulge phone numbers it collected to allow a security feature to be used for advertising.
Included in the settlement is the creation of an independent privacy committee that removes Facebook CEO Mark Zuckerberg’s unbounded control over decisions concerning user privacy. Furthermore, the company also agreed to employ greater care and direction over third-party apps.
Democratic FTC Commissioners Rohit Chopra and Rebecca Slaughter, who opposed the settlement, contended that the $5 billion fine may likely be less than what Facebook gained from abusing users’ privacy.
Chopra said that the penalty only provided Facebook executives ‘blanket immunity’ and no substantial restrictions on the social networking company’s collection and use of users’ data.
“Until we address Facebook’s core financial incentives for risking our personal privacy and national security, we will not be able to prevent these problems from happening again,” Chopra added.
Slaughter also condemned FTC’s decision for absolving Facebook from any liabilities on the claims that it violated the FTC 2012 settlement before June 12, 2019. She also maintained that if the FTC had taken the company to court, the true extent of the breach could have become public.
Although the penalty is the highest than any other disputes of this kind, it wouldn’t cause a ripple on Facebook which made nearly $56 billion in revenue in 2018 and aiming to bring in $69billion this year.
Meanwhile, Facebook also filed complaints against Cambridge Analytica and its CEO Alexander Nix and Aleksandr Kogan, the app developer who sold the data after collecting it. They were accused of using deceptive strategies to take people’s data and use it against them. Both have already agreed to a settlement with the FTC.