Facebook Expects Record-Setting FTC Fine for Privacy Violations
Even Washington is so fed up with Big Tech’s privacy infringements that it is ready to take action. Facebook expects the Federal Trade Commission to slap it with a fine of as much as $5 billion, the company stated in its quarterly earnings report Wednesday.
Five billion would be a record for FTC punishment of a tech company and would signal harsher scrutiny to come for an industry that has accrued unparalleled wealth and power with little regulatory oversight. Facebook’s fine comes after a saga of instances in which it failed to protect user data. Most damningly, the company vowed to shore up its data protection practices in 2011 and can now be accused of failing to uphold that promise.
Facebook’s privacy kerfuffles bring severe consequences to the rest of the advertising technology ecosystem. Studies indicate that the public’s willingness to engage with social media advertising may be on the decline, as the maelstrom of bad publicity about Facebook leads consumers to question whether they can trust what they see on the platform and others like it.
Beyond just social media, consumers are far more concerned about their privacy online now than they were a year ago. Regulation is hitting California in January 2020 and is in the works in nine more states already. This suggests there will soon be a privacy reckoning for the whole ad tech industry, which may have to pay for user data and will at the very least have to be far more transparent about obtaining consent for monetizing or sharing it.