FTC Approves $5 Billion Settlement with Facebook Following Cambridge Analytica Scandal
Facebook has been fined $5 billion by the Federal Trade Commission of the U.S. (FTC), Business Insider reported on Friday, July 12.
The historical penalty comes as a result of Cambridge Analytica case. The U.S. investigation has shown that company had multiple privacy issues and repeatedly violated users’ rights. According to Business Insider, the settlement is compatible to the social media giant’s monthly revenue.
It was not immediately clear whether the fine was combined with any other restrictions. However, NYT revealed that Facebook agreed to a more comprehensive oversight of its data usage.
Facebook foresaw the penalty in its Q1 2019 report. Back then, the corporation warned investors that it might be subject to $3-5 billion fine from the U.S. authorities.
Facebook was involved in a major data scandal with political consulting company Cambridge Analytica since 2018, when over 87 million users data was misused. The social media giant was then accused of data misuse, including selling sensitive personal data to third parties.
The privacy issues might arise again soon, as Facebook announced its highly anticipated cryptocurrency Libra in June. Libra’s blockchain is set to launch in the first half of 2020. Shortly after the announcement, the Financial Action Task Force (FATF) urged its member countries, including the U.S., Japan and China, to tighten cryptocurrency regulations. FATF — an intergovernmental body created to combat money laundering — believes that virtual currencies might be used for criminal purposes.