Federal Trade Commission (FTC) has slapped a fine of $5 billion on Facebook, on account of serious privacy concerns. But the penalty fine that FTC has asked Facebook to pay is something that has been raising a lot of eyebrows.
Here is why?
The fine amount is $5 billion which is even less than a tenth of Facebook’s annual revenue. The charges against Facebook are however serious as the social networking giant has allegedly compromised on the data of millions of users without their consent.
While this is the highest fine imposed by the Federal authorities on any corporate, the amount is less than a tenth of Facebook’s annual turnover which was nearly $56 billion last year.
Announcing the fine, the FTC Chairperson Joe Simons said “Facebook betrayed the trust of its users and deceived them about their ability to control their personal information. The enormity of this penalty resets the baseline when it comes to privacy cases and serves as a deterrent for future violations.”
However, the debate is will the penalty really deter the corporate giants and force them to take stringent measures to secure the privacy of users.
The penalty amount faces strong criticism as it is clearly a meager amount for the corporate given its huge revenue. Moreover, the amount indemnifies the tech giant and does not require it to admit the irregularities.
Apart from the penalty, Facebook will have to constitute an independent privacy oversight commission which can be fired only by a supermajority of the company’s board of directors. The commission will also look into new products from a privacy angle.
Facebook had compromised on nearly 87 million users data which were used by a data-mining firm Cambridge Analytica in 2014-2015.