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Home / Business / FTC's report on a $ 5 billion Facebook deal hits criticism – Axios

FTC's report on a $ 5 billion Facebook deal hits criticism – Axios



Review: It's been 474 days since the FTC confirmed it was investigating the company after a researcher affiliated with consulting firm Cambridge Analytica grabbed Facebook user data in a digital magnet.

  • Critics accused Facebook of violating an agreement with the FTC in 2012 that requires the FTC to be more diligent about user privacy in order to impose higher penalties.
  • Now, the Republican majority of the agency's three commissioners has reportedly given their approval. An agreement worth some $ 5 billion, with two Democrats voting against the deal.
  • The Ministry of Justice must review the agreement before it becomes final.

What they say: The race to unleash the potential The settlement began as soon as the news became known.

Capitol Hill Democrats and advocates of an aggressive new privacy plan were planning the deal.

  • Sen. Richard Blumenthal (D-Conn.) Called the $ 5 billion fine, the biggest in FTC history, a "slap on the wrist" for the mammoth Facebook.
  • Presidential candidate Sen. Elizabeth Warren (D-Mass.) Said the settlement was a "victory for Facebook."
  • Sen. Mark Warner (D-Va.) Said that it was time for Congress to act as "the FTC can not or will not take appropriate security measures to protect the privacy and privacy of users."

Industry groups and [19659011] allies praised it.

  • "The FTC's Facebook fine is unprecedented and will undoubtedly lead to better privacy practices for all companies," said Carl Szabo, General Counsel of NetChoice, in a statement.

What We Do not Know: The exact terms of the agreement that are intended to restrict the conduct of Facebook in any way beyond the financial sanction.

  • Both the FTC and Facebook declined to comment. [19659005] The Facebook stock appeared on the news in suggesting that the markets did not consider this a heavy blow to the social giant.

    • The company itself estimated that the fine in this case could amount to up to $ 5 billion a year.

    Yes, but: Even if the FTC case is resolved, Facebook will face many challenges in the US and abroad. These include the examination by the Attorney General, the possibility of a future antitrust case, and a new tax on his revenue in France, which has been reviewed by the Trump administration.

    The big picture: The fine is over privacy Month-long debates in Washington raise the question of whether regulators have enough power to stem companies like Facebook.

    • Proponents of strict privacy laws said the FTC should be able to impose more severe penalties on companies, such as those with a first offense, or have a broader goal of drafting regulations.

    But the momentum has seriously slowed .

    • Last month, a senior legislator resigned in the Senate Commerce Committee in front of a bipartisan body. This is viewed as a serious effort to negotiate a broad-based data protection law.

    The conclusion: The approved deal may be record breaking, but looks less impressive in context. Facebook's revenue was $ 15 billion for the most recently reported quarter. The reasons for the agreement may be more of a limitation in Facebook's behavior – and whether the deal will spark a fire among lawmakers working on the privacy issue.

    Go Deeper: Our Guide to Reading a Settlement After It's Completed and Published


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