The biggest ever fine to be levied on a technology company, the U.S. Federal Trade Commission has decided to levy a fine of $5 billion on Facebook. This eclipses the last fine paid by Google, which was at $223 million.The Federal Trade Commission voted to fine Facebook for privacy violations and mishandling user data.
The vote went 3-2, as Republicans wanted the fine levied; and Democrats were against it. The case now moves to the Justice Department’s civil division for review. The punishment was long expected, but will not necessarily make a dent in the company’s pockets. However, the company will face additional restrictions and another lengthy stretch of scrutiny. While most companies would find a $5 billion fine devastating; Facebook is ready for it. The tech company earned $56 billion last year, and this year is expected to touch $69 billion. The company will ensure to remove the amount from it’s adjusted earnings.
Wall Street and Facebook executives may breathe easy; but there are many who feel this is just a ‘tap on the wrist’. Privacy advocates and law-makers are more agitated and noted that such a fine for ‘purposeful blatant illegality’ is nothing but ‘chump change’ for the company, which makes tens of billions of dollars every year.
Others observed that what was more important was strong, clear rules to protect consumers. Some have called on the Federal Trade Commission to hold CEO Mark Zuckerberg personally liable for the privacy violations in some way.