WASHINGTON, July 24, 2019 (BSS/AFP) – US regulators are expected to unveil
Wednesday a settlement with Facebook — a reported $5 billion fine that might
be the least painful part of the agreement for the social network.
The deal, which follows a lengthy investigation by the Federal Trade
Commission (FTC), allows Facebook to avoid prosecution for its data
protection lapses.
The real question, however, remains what type of restrictions and
requirements will be placed on the internet giant to ensure future
compliance.
CEO and founder Mark Zuckerberg holds a firm grasp on the reins of
Facebook, which has some 2.7 billion users, and he will be held personally
responsible for implementation of the settlement, according to The Wall
Street Journal.
The young billionaire will be required to check in quarterly with the FTC
to certify that his company is abiding by stipulations. A false statement,
the WSJ reported, would be subject to penalties, an anonymous source with
knowledge of the situation told the newspaper.
Also responsible for compliance would be the company’s board of directors.
Additionally, the FTC will allege that Facebook misled users about how it
used their phone numbers and even a facial recognition tool, in a complaint
that accompanies the settlement, The Washington Post reported.
The regulator’s five-member board adopted the settlement deal in a 3-2
vote, the two votes against being from the panel’s only Democrats, according
to US media.
Investors saw the Democrats’ votes as a sign that restrictions will not be
overly severe, pushing share prices higher.
Initial negotiations had included tens of billions of dollars in fines and
strict measures, according to the Post.
– Unlikely to hurt –
The personal data that Facebook collects from more than 2.7 billion users
is its most valuable asset, which it uses to generate immense advertising
revenue thanks to refined targeting capabilities.
It is precisely because of the way this data is used that the social
network has found itself in hot water and is facing a serious crisis of
confidence.
The FTC announced last year it reopened its investigation into a 2011
privacy settlement with Facebook after revelations that personal data on tens
of millions of users was hijacked by the political consultancy Cambridge
Analytica, which was working on the Donald Trump campaign in 2016.
However the $5 billion fine, the largest penalty ever imposed by the FTC
for privacy violations, is not likely to affect the company’s overall health
— Facebook earned more than $22 billion in 2018 alone after hauling in $55
billion in total revenue.
The company will publish its quarterly earnings Wednesday after Wall Street
closes, which will undoubtedly provide Zuckerberg an opportunity to speak on
the matter.
He also could comment on the Justice Department’s Tuesday announcement that
it will launch a vast antitrust review of major online platforms, believed to
include Facebook, to determine if they have “stifled” innovation or reduced
competition.