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Facebook will pay the largest fine in US history

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Facebook to pay $5 billion FTC fine, but Gene Munster says resolution is months away Description video: Facebook and the FTC have reached an agreement. It would require CEO Mark Zuckerburg to submit quarterly certifications to the FTC. Gene Munster, […]

Facebook to pay $5 billion FTC fine, but Gene Munster says resolution is months away

Description video:
Facebook and the FTC have reached an agreement. It would require CEO Mark Zuckerburg to submit quarterly certifications to the FTC. Gene Munster, founder and managing partner at Loup Ventures, and Maurice Stucke, law professor at the University of Tennessee and former prosecutor for the DOJ, join ‘Squawk Box’ to discuss.

Facebook will pay the largest fine in US history

The Federal Trade Commission (FTC) has officially obliged Facebook to pay $ 5 billion for leaking personal data of users. The company’s shares fell 1% during morning trading, dropping the market cap by $ 6 billion.

Facebook will pay the largest fine in US history

This penalty is the largest ever imposed by the FTC against a tech company. Previous high was a $ 22.5 million fine against Google for its privacy policy.

The FTC drew attention to Facebook in March 2018, after reports that political consultancy Cambridge Analytica gained access to data from 87 million Facebook users..

Separately, the Securities and Exchange Commission announced Wednesday that it accuses Facebook of misleading information about the risk of misuse of user data. The SEC claims that Facebook described the data abuse as hypothetical for investors when it was aware of actual cases of abuse. According to the SEC, Facebook agreed to pay $ 100 million to settle the charges. In a conversation with reporters, SEC Deputy Executive Director Stephanie Avagyan stated that the $ 100 million figure represents «the biggest penalty the SEC has ever judged for this type of disclosure».

Under the FTC’s directive, Facebook is creating an independent privacy committee on its board of directors to remove «unlimited control» Zuckerberg over user privacy decisions, the announcement said. Committee members will be selected by an independent nominating working group and can only be dismissed by two-thirds of the voting shares, preventing Zuckerberg from controlling the vote with his stake..

FTC Chairman Joe Simons and Commissioners Noah Joshua Phillips and Christina Wilson Announce Record Fine «a historic victory for American consumers».