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Business Review Board / Jul. 17, 2019

Facebook Fined $5B for Privacy Violations

Social-media giant is hit with the largest fine in tech history, and yet it's still peanuts.

The U.S. Federal Trade Commission announced Monday that it had concluded its investigation into Facebook and issued a fine of $5 billion for privacy violations and mishandling of user data. The massive fine dwarfs the $22 million fine the FTC levied against Google back in 2012. Still, considering Facebook’s revenue of $56 billion last year and expected $69 billion this year, the fine is easily absorbable for the social-media giant.

Given that the company could essentially write off the fine as a business expense, many see it as little more than a slap on the wrist and question whether it will lead to actual change on Facebook’s part. Nuala O'Connor, president of the Center for Democracy and Technology, lamented, “Privacy regulation in the U.S. is broken.” She then noted, “While large after-the-fact fines matter, what is much more important is strong, clear rules to protect consumers.”

Following the Cambridge Analytica scandal that prompted the FTC investigation, Facebook has also “acknowledged giving big tech companies like Amazon and Yahoo extensive access to users’ personal data, in effect exempting them from its usual privacy rules,” the Associated Press reported. “And it collected call and text logs from phones running Google’s Android system in 2015.” The case now moves to the Justice Department for review, but suffice it to say when users are the product, it’s unlikely Facebook will truly behave any different in the future.

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