Facebook got fined $5 Billion by the US over privacy issues
The US Federal Trade Commission approved a nearly $5 which is almost Rs. Thirty-four thousand two hundred eighty crores billion settlement with Facebook last week over its investigation into the social media company’s carrying of user data, a source familiar with the scenario said on Friday.
The FTC has been investigating accusations that Facebook inappropriately shared information belonging to 87 million users with the now-defunct British political advising firm Cambridge Analytica. The probe has concentrated on whether the data sharing violated a 2011 consent contract between Facebook and the regulator.
Investors cheered news of the agreement and pushed Facebook shares up 1.8%, while several influential Democratic lawmakers in Washington rebuked the suggested penalty as inappropriate.
The FTC is expected to insert in the agreement other restrictions on how Facebook behaves user privacy, for the Wall Street Journal, which also said that the agency vote was with party lines, with three Republicans voting to endorse it and two Democrats resisted.
The agreement would be the most significant civil penalty ever paid to the agency.
The FTC and Facebook dropped to comment.
David Cicilline, who is a Democrat and chair of a congressional antitrust panel, called the $5 billion fine” a Christmas present five months ahead.”
“This fine is a portion of Facebook’s annual income. It won’t make them consider twice about their liability to protect user data,” he stated.
Facebook’s revenue for the 1stquarter of this year was $15.1 billion, which is nearly Rs. 1,02,840 crores while its net income was $2.43 billion (roughly Rs. 16,660 crores). It would have been greater, but Facebook set aside 3 billion dollars (roughly Rs. 20,568) for the FTC penalty.
While the deal resolves a major supervisory headache for Facebook, the Silicon Valley firm still faces further latent antitrust probes as the FTC and Justice Department undertake a wide-ranging review of competition among the most significant US tech firms.
It is also facing public criticism from President Donald Trump and others about its planned Cryptocurrency Libra over issues about secrecy and money laundering.
The Cambridge Analytica missteps, as well as annoy over hate speech and misdirection on its program, have also urged calls from people ranging from presidential nominee Senator Elizabeth Warren to a Facebook co-founder, Chris Hughes, for the government to push the social media giant to sell Instagram, which was bought by it in 2012, and WhatsApp, bought in 2014.
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But the company’s core business has confirmed resilient, as Facebook blew past earnings considers in the past two quarters.
While details of the deal are unknown, in a letter to the FTC earlier this year, Senators Richard Blumenthal who is a Democrat, and Josh Hawley, a Republican, told the agency that even a $5 billion (roughly Rs. 34,280 crores) civil fine was too little and that top officials, potentially comprising founder Mark Zuckerberg, should be held personally liable.
FTC Commissioner Rohit Chopra who is a Democrat has said the company should hold executives responsible for violations of fine decrees if they participated in the violations. Chopra did not answer to requests for comment on Friday.
The dealing still needs to be finalized by the Justice Department’s Civil Division and a final announcement could come as early as the coming week, the source said.