Facebook has agreed to a US$5 billion ($7.1 billion) settlement with the US Federal Trade Commission (FTC) after an ongoing probe into Facebook’s mishandling of user data, according to the Wall Street Journal.
The tech giant’s track record with private data has been appalling.
Passwords have been stored in plain text, millions of Facebook accounts were compromised, and the Cambridge Analytica scandal in which personal information was scraped from Facebook and used to influence the 2016 US presidential election.
International regulatory bodies have been dishing out major fines for data privacy breaches of late.
British regulators last week proposed a $329 million fine of British Airways for a breach that resulted in 500,000 customers having their information stolen.
And earlier this year, France’s privacy protection agency slapped Google with an $80 million fine.
A slap on the wrist
Yet while FTC settlement looked like a big step toward bringing Facebook into line, its immediate fallout showed a lack of concern from Facebook’s investors – who have eagerly watched Facebook’s revenue grow to nearly $80 billion last year.
Facebook’s stock price rose by nearly two per cent immediately following initial reports of the FTC settlement on Friday.
During just the last three months of 2018, Facebook made $9.8 billion in profit – more than enough to cover the $7.1 billion settlement.
Facebook has a current market capitalisation of $832 billion.
Democratic House of Representatives member David Cicilline said in a series of tweets that the settlement was just a ‘slap on the wrist’.
The FTC just gave Facebook a Christmas present five months early.— David Cicilline (@davidcicilline) July 12, 2019
While Facebook and its CEO Mark Zuckerberg continue to appear invincible in the face of regulation, Facebook is also facing push-back against its cryptocurrency project Libra.
US Treasurer Steve Mnuchin said he was wary about Libra in a press conference yesterday.
"The Treasury Department has expressed very serious concerns that Libra can be misused by money-launderers and terrorist financiers," Mnuchin said.
"Cryptocurrencies such as Bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, human trafficking.
"Many organisations have used cryptocurrencies to fund their maligned behaviour. This is indeed a national security issue."
Democratic house representatives have drafted legislation to make it illegal for large tech companies to act as financial institutions and issue digital currencies, according to a Reuters report.
The “Keep Big Tech Out of Finance Act” would impose a fine of $1 million per day on violators.
This draft legislation is likely face strong opposition from Republican representatives, but it shows a growing distate that global regulators are having for the likes of Facebook which will join Google, Amazon, and Apple when they face US Congress this week as part of antitrust investigations aiming to bring Silicon Valley’s giants to account.