The US Federal Trade Commission (FTC) has decided to fine Facebook $5 billion over privacy violations from the Cambridge Analytica scandal as well as a $100 million penalty by the US Securities and Exchange Commission (SEC) for releasing misleading information about user data.
Notwithstanding the highest ever fine imposed on the tech giant, the FTC said that Facebook will also have to submit new sweeping restrictions and a newly modified corporate structure which aims to hold the company accountable for their decision regarding the privacy of its users.
The FTC issued a new 20-year settlement in an effort to avoid another potential situation where Facebook deceives its users about their privacy. The settlement order will reform the way the company makes its decisions about privacy through encouraging greater transparency and holding the tech behemoth responsible through several levels and channels of compliance.
Facebook CEO, Mark Zuckerberg, stated, “The next focus for our company is to build privacy protections as strong as the best services we provide. I’m committed to doing this well and delivering the best private social platform for our community.”
The $5 billion fine accounts for around 9% of the tech company’s 2018 revenue.
In fact, the decisions came amidst Facebook’s announcement of its second quarter earnings. The company’s stock experienced a 2% decrease during this quarter in the pre-market trading.
After the fines were made official, Zuckerberg said, “Just as we have an audit committee of our board to oversee our financial controls, we’ll set up a new privacy committee of our board that will oversee our privacy program. We’ve also asked one of our most experienced product leaders to take on the role of Chief Privacy Officer for Products.”
