Facebook to Pay $5B + $100M for Cambridge Analytica Scandal
Ron Perillo / 1 year ago
Facebook is now facing a $5 billion fine from the US Federal Trade Commission (FTC) in relation to the Cambridge Analytica scandal. This fine is in violation of a 2012 FTC order concerning user data privacy.
Furthermore, Facebook will also have a new management structure. Plus, new rules to follow about how it manages user data as part of the agreement. Specifically, Facebook is now subject to a settlement order spanning 20 years. They will have to create a new independent privacy committee.
Additionally, Facebook directors will have an independent privacy assessor. These will monitor the company and will file reports directly to Facebook directors. These directors themselves will be meeting quarterly to go over the reports.
SEC Also Hits Facebook With Fine
Besides the $5B FTC fine, the US Securities and Exchange Commission (SEC) will also be paid a separate $100 million. This fine is for “misleading disclosures” over the risk of user data abuse. Moreover, the SEC alleges that Facebook knew about data breaches in 2015. However, they misled investors into believing the disclosures were “hypothetical.”
What About Cambridge Analytica?
Other than Facebook, the FTC is also doling out punishments to two key figures in Cambridge Analytica. These are CEO Alexander Nic and Alexandr Kogan who developed the personality test app.
Both have agreed to restrictions on future business conducts. This includes deleting or destroying any remaining personal information they hold from the company.