FTC Slaps Facebook with $5 Billion Fine and New Restrictions for Cambridge Analytica Scandal

Facebook has been slapped with a fine of $5 billion, the second-largest ever by the Federal Trade Commission. Apart from the fine, Facebook is also making some sweeping changes to how it handles user data and privacy.

The FTC started its investigation into Facebook after the Cambridge Analytica scandal. That investigation has now concluded with Facebook settling the matter by paying $5 billion to the FTC.

As a part of its investigation, the FTC found Facebook guilty for violating a number of laws. This includes the inability to protect user data from third parties, using the security number of users to serve ads, and more. Apart from the fine, several restrictions have been imposed on Facebook as well. It will now have to get a security and privacy audit done of every new product or service that it launches.

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” said FTC Chairman Joe Simons. “The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC. The relief is designed not only to punish future violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations. The Commission takes consumer privacy seriously, and will enforce FTC orders to the fullest extent of the law.”

Third-party apps will have to provide Facebook with a reason and purpose as to why they want to access user data. This is a significant restriction and one that will have an immediate effect on all third-party apps on FB’s platform. However, the new rule does not place any kind of restriction of the data that can and cannot be shared once a third-party app has provided the necessary reasoning.

Facebook was also found to be illegally using photos of users to create a facial recognition model despite suggesting otherwise. While the FTC has not asked the company to delete its previous data, it will have to get the necessary consent for new facial recognition models.

On its part, Facebook has already announced how it is cleaning up data access for its partners.

Our Take

The new restrictions from the FTC put a greater level of accountability on FB’s board of directors. However, it does not hold any of them liable for the Cambridge Analytica scandal. While Facebook will be paying a fine of $5 billion for the scandal, the company’s CEO Mark Zuckerberg has not been held liable for it which I feel is not fair. Apart from the fine, the FTC should have taken some action against Facebook’s CEO as well.

What do you think about FTC’s $5 billion fine and restrictions on Facebook? Do you think its fair? Or the FTC could have done more?

[Via FTC]