Facebook in its quarterly financial results published on Wednesday, April 24, disclosed that it expects the Federal Trade Commission (FTC) to punish them with a one-time fine in the range of $3 billion to $5 billion. If that happens, it would be the most significant fine by the FTC against a tech company.
Facebook Could Be Fined for Privacy Violations
The social media company believes that the FTC will fine them for privacy violations even though the commission is still carrying out investigations. Facebook doesn’t know the exact amount but estimates that the fine would be around $3 billion to $5 billion. Also, the company does not know when it will be fined or the terms of the final ruling.
The company has been in negotiations for many months after it was alleged to have violated a 2011 privacy consent decree. Investigations revealed that Facebook’s privacy violations had caused harm to consumers and the company made promises to introduce measures that would protect its user’s privacy.
However, the FTC launched another investigation into the company’s privacy policies following the Cambridge Analytica scandal a few years ago. Cambridge Analytica is a political consulting company in the UK that developed data profiles for President Donald Trump’s campaign. The company harvested users data without their permission, and Facebook was accused of not protecting its users’ privacy.
Facebook also experienced a data breach which led to the leakage of personal information for roughly 50 million of its users. The company estimating an amount could signal that an agreement is near as it has been negotiating with the FTC for a while now.
If the fine reaches the estimated amount, then it would be the largest the FTC has ever charged a tech company. The move would go against the norm as US regulators are not known for heavily sanctioning big tech companies in the country.
The most significant fine by the FTC on a tech company was against Google seven years ago. The search engine giant was charged $22 million for misrepresenting how it utilizes some online tracking mechanisms.
Trends Could Change
Even though the US doesn’t have a history of heavily fining big tech companies, the pattern could change in the future. There have been calls amongst politicians and the executive arm of the government for greater regulation of Silicon Valley companies.
Senator Elizabeth Warren, who is a presidential candidate under the Democratic Party believes a regulatory plan is needed to break up tech giants in the country including Facebook, Apple, Amazon, and Google.
The presidential aspirant’s plan would lead to a rollback of massive deals by these tech giants including Facebook’s purchase of WhatsApp and Instagram, and Amazon’s acquisition of Whole Foods. President Donald Trump has also expressed concerns over the colossal power tech companies command and their control in the distribution of information.
Representative David Cicilline from Rhode Island believes that a fine would not be enough to curb such cases. Instead, “Facebook must be held accountable — not just by fines — but also far-reaching reforms in management, privacy practices, and culture,” he said. He is of the view that Congress should act on this issue.
Due to the ongoing privacy issues, many people are now taking action to avoid surveillance from big tech firms and governments, such as by using VPN services and ditching social media.
Facebook on its part could be making changes to its privacy culture. Last month, Facebook CEO, Mark Zuckerberg revealed that he plans to shift people away from public broadcasting on social media platforms, and instead to private conversations. This move is expected to help the company manage the problems associated with harmful contents and misinformation.