Back in April, we informed you that in calculating its first-quarter earnings report, Facebook took charge of $3 billion. The corporate stated in its report that it expected to be fined $5 billion by the Federal Trade Commission (FTC). Today, Reuters studies that the FTC has indeed permitted a $5 billion settlement with Facebook for violating a consent decree it signed with the regulatory company back in 2011. Under the terms of the consent decree, the social media network couldn’t use member profiles without their express consent.
Nevertheless, it was discovered last year that tens of millions of Facebook users did have their data used without consent. A Russian-American professor at Cambridge College by the name of Aleksandr Kogan used an app to help him collect the data on 87 million members. He then sold the data to Cambridge, a political consultancy with ties to ex-Trump adviser Steve Bannon. The information was reportedly used to create psychological profiles serving to the Trump campaign know which areas of the country they needed to spend more time in and money on. This violated the consent decree.
While $5 billion is a big price for most outfits, Facebook is such a money generator that it will hardly be missed. For instance, in 2018, the company generated $55.8 billion in income and $22.1 billion in income. For the first quarter of this year, Facebook had $15.1 billion in revenue and $2.4 billion in net profits after subtracting the $3 billion cost. When the first quarter came to a close on the end of March, Facebook had $45.42 billion in cash and equivalents in its accounts. The small size of the fine, when compared to the social media firm’s financials, led Rhode Island Democratic Representative David Cicilline to call it “a Christmas present five months early.” He is additionally noted that “This fine is a fraction of Facebook’s annual income. It would not make them think twice about their responsibility to guard user data.”