COLORADO SPRINGS — In this 360° Perspective Facebook has to pay a record-breaking $5 billion fine. It's for violating user privacy, but why won't users see any of the cash?
The FTC fined the social media giant for failing to protect the personal information of some 2.3 billion users worldwide. The personal information of 87 million users went to Cambridge Analytica, a political consulting firm. Users personal information was shared with third party apps and they were opted into facial recognition technology by default.
"Facebook betrayed the trust of its users and deceived them about their ability to control their personal information," FTC Chairman Joe Simons said.
This fine the biggest ever civil penalty levied by the FTC. It also covers Facebook subsidiaries Instagram and WhatsApp.
While not admitting guilt, CEO Mark Zuckerberg promised to make some major structural changes as a result. They're agreeing to government oversight for 20 years and are creating a privacy committee.
"We're gonna change the way we operate across the whole company, from the leadership on down and the ground up. We're going to change how we build products, and if we won't we're gonna be held accountable for it," Zuckerberg said in a Facebook post.
Some critics say the penalties don't go far enough, for instance, it doesn't restrict Facebook's use of personal data for advertising. While $5 billion is a massive amount it only equals about a month of revenue for Facebook.
All that money, according to Business Insider, will go straight to the U.S. Treasury, affected users won't see a penny. The FTC told Business Insider, by law, there's nothing else that can be done with that money.
One NBC Bay Area investigation analyzed 3 years of federal fines at nine large agencies, totaling more than a billion dollars. Most of the fines went back to the Treasury's general fund.
One public safety activist, Rosemary Shahan, told them she and others have tried to change the law to direct fines to victims, but lawmakers continue to resist.
The $5 billion fine is nearly 30 times the FTC's largest-ever civil penalty to date, $168 million to Dish Network in 2017.
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