You may have seen headlines the last few days about Facebook getting fined $5 Billion related to its privacy practices and the Cambridge Analytica incident. Upon a closer look, the reports are that it is a proposed settlement between the FTC and Facebook that the FTC approved, but has not yet made public.
Despite the massive number of $5 billion, some people think that Facebook is getting a sweetheart deal. A few senators have already written a letter to the FTC asking questions about the settlement, concerned that it does not go far enough to address the privacy issues with Facebook. According to some data about Facebook’s earnings being around $16 billion, the fine would represent nearly 1/3 of that. While it is certainly an impressive number that should have some deterrent effect on other would-be privacy violators, it’s hard to know exactly whether this is enough to make a difference if it does at all. On the other hand, it is hard to call $5 billion dollars and a 1/3 of yearly revenue a sweetheart deal. In comparison, recent fines proposed for Marriott and British Airways by the ICO for violations of the GDPR topped out at roughly $230 million and 1.5% of yearly revenue. Only time will tell whether these fines will really serve as the deterrent and enforcement tool they were meant to be, but his news about FTC and Facebook is definitely something to keep an eye on in coming weeks.