The Federal Trade Commission hit Facebook with a massive $5 billion fine Wednesday due to the social network’s lax privacy policies.
This stands as the largest fine ever dished out to a tech company by the FTC. The massive penalty eats up approximately 9% of Facebook’s total 2018 revenue.
The FTC probe into Facebook started in March 2018. The investigation started after revelations that political consulting firm Cambridge Analytica accessed data from 87 million Facebook users.
Facebook faces ‘historic’ fine for privacy violations
FTC commissioners approved the fine in a 3-2 vote Wednesday. In a statement, majority voters FTC Chairman Joe Simons and commissioners Noah Joshua Phillips and Christine Wilson hailed the fine as “historic.”
“The magnitude of this penalty resets the baseline for privacy cases — including for any future violation by Facebook — and sends a strong message to every company in America that collects consumers’ data: where the FTC has the authority to seek penalties, it will use that authority aggressively,” the majority voters wrote.
In addition to paying the fine, Facebook must create an independent privacy committee. Facebook CEO Mark Zuckerberg also must work with compliance officers to submit quarterly compliance reports. CNBC additionally notes that:
“Outside of Facebook, an independent third-party assessor approved by the FTC will conduct biennial assessments and report to the new privacy committee quarterly. Facebook must notify the assessor within 30 days of discovering that data of 500 or more users has been compromised, according to the release.”
Apple clashes with Facebook over privacy
Apple and Facebook previously clashed over Facebook’s cavalier approach to user privacy. Earlier in 2019, Apple banned Facebook’s Research app from the App Store following news that it gathered personal and sensitive data from 187,000 users. When Apple temporarily revoked Facebook’s enterprise certificate, the move broke Facebook’s internal apps.
Last year, Apple CEO Tim Cook slammed the social network’s lax approach to privacy. When asked what he would do if he found himself in the same situation as Zuckerberg during the Cambridge Analytica scandal, Cook took a swipe at Facebook’s leadership.
“I wouldn’t be in this situation,” Cook replied.