$5bn US fine set for Facebook on privacy probe

Some Facebook critics have argued the company should face tougher sanctions. (File/AFP)
Updated 13 July 2019

$5bn US fine set for Facebook on privacy probe

  • It would be the largest penalty ever imposed by the US Federal Trade Commission for privacy violations
  • The deal will likely include restrictions on how Facebook is able to use personal data

WASHINGTON: US regulators have approved a $5 billion penalty to be levied on Facebook to settle a probe into the social network’s privacy and data protection lapses, the Wall Street Journal reported Friday.
The newspaper said the Federal Trade Commission approved the settlement in a 3-2 vote, with the two Democratic members of the consumer protection agency dissenting.
According to the report, the deal, which would be the largest penalty ever imposed by the FTC for privacy violations, still needs approval from the Justice Department before it is finalized.
Although details have not yet been released, the deal will likely include restrictions on how Facebook is able to use personal data.
Charlotte Slaiman of the consumer group Public Knowledge thinks it is unlikely the restrictions will be overly harsh.
“We don’t yet know key aspects of the settlement: whether Facebook must make any changes to its business model or practices as a result,” said Charlotte Slaiman, the group’s Competition Policy Counsel.
“By itself, this fine will not be sufficient to change Facebook’s behavior.”
The outlook was more optimistic at the Center for Democracy and Technology, whose president Nuala O’Connor said the fine underscored the importance of “data stewardship” in the digital age.
“The FTC has put all companies on notice that they must safeguard personal information,” O’Connor said.
Facebook did not immediately respond to an AFP query on the agreement.
The FTC announced last year it reopened its investigation into a 2011 privacy settlement with Facebook after revelations that personal data on tens of millions of users was hijacked by the political consultancy Cambridge Analytica, which was working on the Donald Trump campaign in 2016.
Facebook has also faced questions about whether it improperly shared user data with business partners in violation of the earlier settlement.
The leading social network with more than two billion users worldwide has also been facing inquiries on privacy from authorities in US states and regulators around the world.
The settlement would be in line with Facebook’s estimate earlier this year when it said it expected to pay $3 billion to $5 billion for legal settlements on “user data practices.”
The fine is unlikely to hurt Facebook, which logged a profit of $2.4 billion on revenue that climbed 26 percent to $15.1 billion in the first three months of this year.
Facebook’s stock value increased 1.8 percent after the fine was announced, closing at nearly $205, the highest it has been all year.
Some Facebook critics have argued the company should face tougher sanctions including monitoring of its data practices, or that chief executive Mark Zuckerberg should be personally liable for penalties.
Faced with criticism, Facebook’s head of global affairs, Nick Clegg, called on governments to do more to regulate social networks, instead of leaving the work to companies.
“It’s not for private companies, however big or small, to come up with those rules. It is for democratic politicians in the democratic world to do so,” Clegg said in a June 24 interview with the BBC.
But there are increasing calls to dismantle the massive social network.
In May, one of Facebook’s co-founders called for the social media behemoth to be broken up, warning that Zuckerberg had become far too powerful.
“It’s time to break up Facebook,” said Chris Hughes in an editorial for The New York Times, saying it had become necessary to separate the social network from Facebook’s Instagram and WhatsApp services.
Zuckerberg’s “focus on growth led him to sacrifice security and civility for clicks,” said Hughes.


Google says to block search engine in Australia if forced to pay for news

Updated 22 January 2021

Google says to block search engine in Australia if forced to pay for news

  • Google’s threat escalates a battle with publishers such as News Corp. that is being closely watched around the world

SYDNEY: Alphabet’s Google said on Friday it would block its search engine in Australia if the government proceeds with a new code that would force it and Facebook to pay media companies for the right to use their content.
Google’s threat escalates a battle with publishers such as News Corp. that is being closely watched around the world. The search giant had warned that its 19 million Australian users would face degraded search and YouTube experiences if the new code were enforced.
Australia is on course to pass laws that would make tech giants negotiate payments with local publishers and broadcasters for content included in search results or news feeds. If they cannot strike a deal, a government-appointed arbitrator will decide the price.
“Coupled with the unmanageable financial and operational risk if this version of the Code were to become law, it would give us no real choice but to stop making Google Search available in Australia,” Mel Silva, managing director for Australia and New Zealand, told a senate committee.
Silva made no mention of YouTube in prepared remarks, as the video service is expected to be exempted under revisions to the code last month.
Google’s comments drew a sharp rebuke from Australian Prime Minister Scott Morrison who said the country makes its rules for “things you can do in Australia.”
“People who want to work with that in Australia, you’re very welcome. But we don’t respond to threats,” Morrison told reporters.
At the inquiry, Australian Competition and Consumer Commission chair Rod Sims, who has overseen the new rules, said he could not predict what the tech giants would do but said “there’s always brinkmanship in serious negotiations.”
“They talk of commercial deals where they’re in full control of the deal,” he said. “In my view that’s not a commercial deal.”
Google has called the code overly broad and said that without revisions, offering even a limited search tool would be too risky. The company does not disclose sales from Australia, but search ads are its biggest contributor to revenue and profit globally.
The United States government this week asked Australia to scrap the proposed laws, which have broad political support, and suggested Australia should pursue a voluntary code instead.
Australia announced the legislation last month after an investigation found Google and social media giant Facebook held too much market power in the media industry, a situation it said posed a potential threat to a well-functioning democracy.
Google’s threat to limit its services in Australia came just hours after the Internet giant reached a content-payment deal with some French news publishers as part of three-year, $1.3-billion push to support publishers.
Google’s testimony “is part of a pattern of threatening behavior that is chilling for anyone who values our democracy,” said Peter Lewis, director of the Australia Institute’s Center for Responsible Technology.