FTC slaps Facebook $5 billion for violating users’ privacy

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Facebook under investigation by EU regulator over new data breach

The Federal Trade Commission (FTC) officially announced a $5 billion penalty against Facebook (NASDAQ: FB) for mishandling of users’ personal data and privacy.

The penalty is the largest imposed by the FTC against any company for violating consumer’s privacy. It is almost 20 times bigger than the world’s largest penalty imposed on privacy or data security violation.

The FTC imposed the record-breaking fine after a year-long investigation into allegations that Facebook repeatedly used deceptive disclosures and settings to undermine users’ privacy options. The Commission found that the company’s privacy practices violated its 2012 settlement order.

In a statement, FTC Chairman Joe Simmons said, “Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices.”

“The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC. The relief is designed not only to punish future violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations. The Commission takes consumer privacy seriously, and will enforce FTC orders to the fullest extent of the law,” added Simmons.

FTC imposes new restrictions on Facebook

In addition to the fine, the FTC imposed new restrictions on Facebook’s business operations. The 20-year settlement order requires the social media giant to reform its approach to privacy. The order also requires the company to implement strong procedures to ensure that its executives are accountable for their decisions regarding privacy and the decisions are subject to oversight.