FTC is about to spank Facebook really hard
2018 was not a good year for Facebook in terms of public relations. There were a number of issues revolving around the misuse of members' personal data. The most public was the Cambridge Analytical scandal that saw personal data from as many as 87 million members used without their consent. The Washington Post says that according to three anonymous sources familiar with the matter, the FTC is poised to hit Facebook with a record setting fine after an investigation that started in March.
The previous high water mark for an FTC fine was assessed against Google in 2012. The search giant was forced to write a $22.5 million check to Uncle Sam for failing to adhere to an agreement made with the FTC to improve its privacy practices. The sources that have been speaking to the Post say that the FTC fine against Facebook will be much higher.
The whole Cambridge Analytica scandal is complex, and the entire story has yet to came out. But at this point it appears that Russian-American professor Aleksandr Kogan used a quiz to collect data on Facebook members and their friends and family members. Kogan, who was supposed to use the data for research only, turned around and sold the information to Cambridge Analytica. The latter then sold that data months before the 2016 presidential election to the Trump campaign, which used it to create psychological profiles. This helped the campaign decide where it needed to allocate more resources.
After the Cambridge Analytica news came out, the FTC decided to investigate. Facebook's actions violated a Consent Decree that it signed with the government agency back in 2011 preventing Facebook from allowing users' personal data to be mined without permission; Facebook seemingly violated this deal with the Cambridge Analytica mess.
Months after the Cambridge Analytica story became known, Facebook had other issues pertaining to customer data including one breach that left Facebook members sensitive information up for grabs including their "Username, gender, locale/language, relationship status, religion, hometown, self-reported current city, birthdate, device types used to access Facebook, education, work, the last 10 places they checked into or were tagged in, website, people or Pages they follow, and the 15 most recent searches"
The largest fine that Facebook ever had to pay for failing to safeguard user data is the $640,000 imposed against it in the U.K. While Facebook is appealing that fine, it is bracing itself to hear the record breaking amount that the FTC wants it to pay. Still, it isn't like the company can't afford it; for the third quarter of 2018, the last period reported, Facebook reported net income of $5.1 billion.