Facebook not anxious about $5 billion FTC fine

Facebook hit with $5 billion fine by the US FTC for privacy violations

In addition to paying the record United States dollars 5 billion in penalty, Facebook has also agreed to submit itself to new restrictions and a modified corporate structure that will hold the company accountable for the decisions it makes about its users' privacy.

The Republican FTC majority said the settlement "significantly diminishes Mr. Zuckerberg's power - something no government agency, anywhere in the world, has thus far accomplished".

Facebook is prohibited from asking for email passwords to other services when consumers sign up for its services.

"Advertisers remain dedicated to Facebook despite its problems", said Debra Aho Williamson, a Facebook analyst for eMarketer. "We've also asked one of our most experienced product leaders to take on the role of Chief Privacy Officer for Products", Zuckerberg said immediately after the fines were made official. But the company will still be able to collect the same kinds of user data and target its promotions in the same way it does today. We will be more robust in ensuring that we identify, assess and mitigate privacy risk.

The FTC also said that Cambridge Analytica's former CEO Alexander Nix and former app developer Aleksandr Kogan had agreed to a settlement restricting how they conduct business. Several lawmakers criticized the settlement. For example, Facebook is expected to release a "Clear History" feature later this year, which could hamper ad targeting if Facebook can't link users' browsing histories to their profiles.

US Senator Richard Blumenthal, a Democrat from CT, called the settlement "a fig leaf" that offers "no accountability for top executives". "Facebook has already written this penalty down as a one-time-cost in return for the extraordinary profits reaped from a decade of data misuse", said Blumenthal, a Democrat. "It utterly fails to penalise Facebook in any effective way". If members of this committee see room for improvement, they will report to the board.

The social media giant also needs to operate with a new set of restrictions on its business. The agency did not say what companies it's looking into, but antitrust concerns have long swirled around Amazon, Apple, Facebook and Google. The company says that it has 1.59 billion daily average users, an increase of 8% over the year-ago quarter.

"This was our mistake, and we are correcting it", Facebook said in a statement, noting that the settlement will require a "fundamental shift in way we approach our work".

In their dissents, both Rohit Chopra and Rebecca Kelly Slaughter criticized the agreement for being too soft for a company of this caliber, and for letting executives like Zuckerberg get away with exercising law-breaking decisions simply because they have the money to avoid the fallout that otherwise hits key people at smaller companies in a more effective way.

Facebook, in its second quarter earnings announcement, said: "We have agreed to implement a comprehensive expansion of our privacy program, including substantial management and board of directors oversight, stringent operational requirements and reporting obligations, and a process to regularly certify our compliance with the privacy program to the FTC". "It is hard to conclude that the commission got the better end of the bargain".

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