US regulators have apparently been discussing a "record-setting" fine against Facebook for its lack of privacy protection.
According to reports out of The Washington Post, the fine is being considered by the Federal Trade Commission, who opened up a probe into Facebook last year, after the many privacy scandals that plagued the company in 2018. According to people familiar with the situation, the fine is going to be "much larger" than the $22.5 million fine that the FTC imposed on Google about seven years ago.
This would mark the first major punishment against Facebook in the US, after the many privacy scandals that were uncovered last year. Though the biggest one was indeed the Cambridge Analytica scandal where Facebook was basically giving away users' information without their consent. This was part of how Trump was able to win the election, though it the information wasn't much difference than what Obama's campaign used in 2008, but the way it got the information was.
The findings and the exact amount of this fine, has been discussed in private meetings at the FTC in recent weeks. But they have not been finalized yet. Facebook has also been talking with FTC staffers about the investigation, though it is unclear whether Facebook will settle with the FTC and accept the fine, or challenge it in court.
Since the government shutdown last month, the FTC has also been shut down, so it was not able to give a comment on the case, or finalize the fine just yet. But the fine should be coming pretty soon, possibly before the government reopens. And it will likely have an effect on Facebook's share price when the news does break.
For years, Facebook has been taking a pretty lazy approach to protecting consumers' data. It finally caught up with them in 2018. Cambridge Analytica was the first straw there, which was a huge deal for Facebook, and it lost a ton of its market cap – with a couple of its worst trading days ever. Following that, a few more privacy scandals hit the headlines, though they weren't as big as Cambridge Analytica, but are still doing damage to Facebook's reputation.
This is because it is showing its users that Facebook just doesn't care for your privacy. Facebook only wants your information, as that is what is valuable. With your information, Facebook is able to sell it to advertisers and make money. After all, Facebook is a free website, so collecting your data and selling it, is how Facebook makes money. That's the general gist of how ads work on Facebook and other websites.
Following these many privacy scandals last year, it led to many people deleting their Facebook accounts. In fact, the founders of WhatsApp – who sold their company to Facebook a few years ago – even called for everyone to delete their Facebook account. When your employees start calling for people to uninstall your main app, it shows that there is a real issue. Of course, more people use WhatsApp than the Facebook app anyways, so this did speak volumes to its users.