Facebook is the latest recipient of a record-breaking fine set by the Federal Trade Commission (FTC) in light of multiple data scandals, including Cambridge Analytica.
The investigation into Facebook's conduct has been ongoing since March 2018. Last April, Facebook itself stated that approximately 87 million users were hit by the Cambridge Analytica data sharing scandal.
The $5bn fine is the largest financial punishment to be issued by the FTC and it is said to reflect the seriousness of Facebook's haphazard approach to data protection. However, a multi-billion dollar fine is barely a slap on the wrist for the company.
It's the second significant fine to be given to a social platform this year, with Bytedance's TikTok also bagging a $5.7m punishment for violating COPPA last year. YouTube is also currently under investigation that will also likely end with a fine and a telling off.
Facebook generated a cool $15bn during Q1 2019 alone, topping up the $22 billion profit it made in 2018. The company's Q1 financials prematurely accommodated a potential $3bn fine from the FTC. Facebook's stock also rose by 1.8 per cent after news of the fine went public.
For better, for worse
If anything, Facebook has benefitted from a billion dollar punishment. The Washington Post covered other elements of the settlement, including a ruling that states Facebook will need to disclose how it'll use data before new products are released.
US Senators are already commenting on the underwhelming settlement. Senator Ron Wyden said that "no level of corporate fine can replace the necessity to hold Mark Zuckerberg responsible for the flagrant, repeated violations of Americans' privacy".
Senator Elizabeth Warren of Massachusett also weighed in, saying "the FTC should break Facebook up, plain and simple. Enough is enough."
And of course, the fine will have little effect on Facebook's recent plans to create and release its own cryptocurrency, Libra, in 2020. Although the company assures skeptics that Libra will have a strong focus on data and currency protection, this recent FTC flop implies that no matter what Facebook violates, the company can always foot the bill.
