TIL Desk/Business/Washington/ In a historic judgment, the US Federal Trade Commission (FTC) on Wednesday slapped a massive $5 billion fine on Facebook over users’ privacy violations in the Cambridge Analytica scandal, along with the US Securities and Exchange Commission (SEC) directing the social networking platform to pay $100 million penalty for making misleading disclosures regarding the risk of misuse of user data.
Apart from the record-breaking $5 billion penalty, Facebook will also submit to new sweeping restrictions and a modified corporate structure that will hold the company accountable for the decisions it makes about its users’ privacy, the FTC said in a statement.
To prevent Facebook from deceiving its users about privacy in the future, the FTC’s new 20-year settlement order overhauls the way the company makes privacy decisions by boosting the transparency of decision making and holding Facebook accountable via overlapping channels of compliance.
The $5-billion fine represents nearly 9 per cent of Facebook’s 2018 revenue. The decision came as Facebook prepared to announce its second quarter results at the end of trading on Wednesday. The company was yet to comment on the two verdicts.
