It's not too often that a major company takes accountability for wrongdoing. Oftentimes, it takes a significant effort from law enforcement or the press in order to force a business to reform or dismantle itself after taking advantage of customers and trying to get away with it.
Well, one of the worst offenders out there looks like they're finally about to pay the piper. After a number of landmark hearings, the Federal Trade Commission (FTC) has voted to impose a record-breaking fine on Facebook for its numerous privacy and data mismanagement episodes.
When all's said and done, the government looks to claim a sizable amount of money from the social media giant. But will this massive fine even make a dent on Facebook's bottom line?
A multi-billion dollar fine
According to a report in The Wall Street Journal, the FTC voted along party lines to approve a settlement against Facebook equaling $5 billion. To date, this is the largest fine in FTC history -- with the closest runner-up only reaching a mere $22.5 million. Ironically, that fine was levied against Facebook's rival, Google, in 2012.
The fine is related to several cases involving Facebook, but most notably the Cambridge Analytica scandal and the company's numerous data leaks. Facebook claimed in April that it had set aside around $3 billion in anticipation of fines, making the latest number $2 billion higher than Facebook's initial projections
This proposal, though approved by vote, is still under review from the Department of Justice. This story will be updated accordingly as they reach a verdict.
Will this affect Facebook in any way?
For those of you eager to see Facebook get its just desserts for its mishandling of user data, the story doesn't seem to be panning out that way, unfortunately. Facebook recently reported more than $15 billion in sales. This means that the fine only eats up one-third of Facebook's total earnings in sales.
For perspective, when they were negotiating potential fines earlier in the case, Facebook's $3 billion projection only represented around 6% of the company's cash stockpile.
Sadly, this judgment appears to be more of a slap on the wrist than substantive deterrence for Facebook. That said, word-of-mouth for the company hasn't been all that great recently.
If the company wishes to stay relevant, it needs to at least give the appearance of innovation and care. But with projects like Libra and Mark Zuckerberg's "privacy initiative," that might just be the sweet spot it's aiming for.
Or maybe it really did have a change of heart. You can never really tell with Facebook, can you?
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