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FTC fines Facebook $5 billion over Cambridge Analytica scandal

The company must also appoint an independent privacy committee to its board of its directors.

  • The FTC said Facebook violated a 2012 agreement it made with the agency over user data.
  • Facebook must restructure its board of directors, undergo regular privacy audits and pay a $5 billion fine.
  • Still, some say the punishment doesn't go far enough.

The Federal Trade Commission (FTC) has ordered Facebook to create new layers of oversight on how it handles user data, and to pay a $5 billion fine, according to an agreement announced Wednesday between the company and the federal agency.

The punishment results from an FTC investigation into Facebook that was prompted after news broke of the 2018 Cambridge Analytica scandal. Cambridge Analytica was a British consulting firm that used a third-party app to harvest personal data from approximately 87 million Facebook users.

By letting this third-party app collect users' data without their clear knowledge and consent, the FTC said Facebook violated a 2012 settlement order it had reached with the social media company.

Under the new agreement, Facebook must add an independent privacy committee to its board of directors, which the FTC wrote will remove "unfettered control by Facebook's CEO Mark Zuckerberg over decisions affecting user privacy." This new committee will be charged with appointing "compliance officers" who can be held accountable if the company mishandles users' data. Facebook must also submit to regular privacy audits.

"The $5 billion penalty against Facebook is the largest ever imposed on any company for violating consumers' privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide," said FTC officials in a press statement.

But some think the punishment is merely a slap on the wrist. The FTC's sole two Democratic commissioners disagreed with their three Republican colleagues over the new settlement, which stopped short of holding Zuckerberg personally accountable for mishandling user data, and also granted immunity to Facebook executives for actions taken before June 12, 2019.

"I fear it leaves the American public vulnerable," Rebecca Kelly Slaughter, a Democratic commissioner, told The New York Times.

"While it is difficult in this case to quantify the economic value of the violations to the company, there is good reason to believe $5 billion is a substantial undervaluation," Slaughter wrote in a statement to CNBC.

Facebook said the new agreement represents a "fundamental shift" in their approach to user privacy.

"It will mark a sharper turn toward privacy, on a different scale than anything we've done in the past," Facebook staff wrote in a blog post. "We will be more robust in ensuring that we identify, assess, and mitigate privacy risk. We will adopt new approaches to more thoroughly document the decisions we make and monitor their impact. And we will introduce more technical controls to better automate privacy safeguards."

The FTC also ordered Facebook to implement several other new privacy requirements:

  • Facebook must exercise greater oversight over third-party apps, including by terminating app developers that fail to certify that they are in compliance with Facebook's platform policies or fail to justify their need for specific user data;
  • Facebook is prohibited from using telephone numbers obtained to enable a security feature (e.g., two-factor authentication) for advertising;
  • Facebook must provide clear and conspicuous notice of its use of facial recognition technology, and obtain affirmative express user consent prior to any use that materially exceeds its prior disclosures to users;
  • Facebook must establish, implement, and maintain a comprehensive data security program;
  • Facebook must encrypt user passwords and regularly scan to detect whether any passwords are stored in plaintext; and
  • Facebook is prohibited from asking for email passwords to other services when consumers sign up for its services.

Facebook was also fined $100 million on Wednesday by the Securities and Exchange Commission for misleading investors after the Cambridge Analytica story broke. Facebook also faces a separate lawsuit from the Department of Justice over claims that the company "repeatedly used deceptive disclosures and settings to undermine users' privacy."

It's unclear whether the new penalty will actually force Facebook to "fundamentally shift" how it handles user privacy. But, at least according to the FTC's three Republican commissioners, it didn't seem reasonable, legally speaking, to push for harsher punishments at this time.

"Is the relief we would obtain through this settlement equal to or better than what we could reasonably obtain through litigation?" they told The New York Times. "If the answer had been 'no,' it would have made sense to aggressively move forward in court. The answer, however, was 'yes.'"

Is the universe a graveyard? This theory suggests humanity may be alone.

Ever since we've had the technology, we've looked to the stars in search of alien life. It's assumed that we're looking because we want to find other life in the universe, but what if we're looking to make sure there isn't any?

According to the Great Filter theory, Earth might be one of the only planets with intelligent life. And that's a good thing (NASA, ESA, and the Hubble Heritage Team [STScI/AURA]).
Surprising Science

Here's an equation, and a rather distressing one at that: N = R* × fP × ne × f1 × fi × fc × L. It's the Drake equation, and it describes the number of alien civilizations in our galaxy with whom we might be able to communicate. Its terms correspond to values such as the fraction of stars with planets, the fraction of planets on which life could emerge, the fraction of planets that can support intelligent life, and so on. Using conservative estimates, the minimum result of this equation is 20. There ought to be 20 intelligent alien civilizations in the Milky Way that we can contact and who can contact us. But there aren't any.

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The key to better quality education? Make students feel valued.

Building a personal connection with students can counteract some negative side effects of remote learning.

Future of Learning
  • Not being able to engage with students in-person due to the pandemic has presented several new challenges for educators, both technical and social. Digital tools have changed the way we all think about learning, but George Couros argues that more needs to be done to make up for what has been lost during "emergency remote teaching."
  • One interesting way he has seen to bridge that gap and strengthen teacher-student and student-student relationships is through an event called Identity Day. Giving students the opportunity to share something they are passionate about makes them feel more connected and gets them involved in their education.
  • "My hope is that we take these skills and these abilities we're developing through this process and we actually become so much better for our kids when we get back to our face-to-face setting," Couros says. He adds that while no one can predict the future, we can all do our part to adapt to it.
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Study details the negative environmental impact of online shopping

Frequent shopping for single items adds to our carbon footprint.

A truck pulls out of a large Walmart regional distribution center on June 6, 2019 in Washington, Utah.

Photo by George Frey/Getty Images
Politics & Current Affairs
  • A new study shows e-commerce sites like Amazon leave larger greenhouse gas footprints than retail stores.
  • Ordering online from retail stores has an even smaller footprint than going to the store yourself.
  • Greening efforts by major e-commerce sites won't curb wasteful consumer habits. Consolidating online orders can make a difference.
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Personal Growth

Childhood sleeping problems may signal mental disorders later in life

Chronic irregular sleep in children was associated with psychotic experiences in adolescence, according to a recent study out of the University of Birmingham's School of Psychology.

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