Facebook Inc. (NASDAQ:FB) again made headlines when the stocks of the social platform rose significantly, after $5 billion fine on Facebook imposed by FTC.
In April we reported the first time that Facebook is staring at the maximum penalty that any tech company faced ever. In the latest development, it’s now confirmed that that FTC, by a narrow margin of 2-3 votes, has imposed a $5 billion fine on Facebook. The fine was imposed for violating the earlier consent decree. The app sucked up a lot of data that eventually landed up in the hands of Cambridge Analytica’s. The fine gathered mixed reactions from people, the majority of them being angry.
The former acting-CTO of the FTC, Neil Chilson said that this sort of thing is extremely aggressive and most importantly considering the FTC’s mandates and powers. Keeping it brief he said that considering FTC’s power and the incident with Cambridge Analytica, a $5 billion dollar fine is quite a lot for the harms are not directly quantifiable. He backed up FTC by saying that it is only implementing a general law to put a stop on practices that harm the consumers.
FTC has been an aggressive privacy enforcer using a statute that isn’t specifically intended to protect privacy.
But, what’s more, interesting here is the effect of FTC fine on Facebook, especially on Mark Zuckerberg, which is quite unprecedented, rather surprising.
After FTC confirmation on $5 billion fine, Facebook shares rose up to 1% on Friday itself. This is the highest jump the company has recorded in the past year. It has a direct impact on the net worth of Mark Zuckerberg who gained quite an amount from this fine. The value of his stakes in Facebook saw a rise of more than $1 billion after 30 minutes of the news.
Zuckerberg is one of the leading shareholders of Facebook. A rise of only 1% in the company’s stocks value caused him a huge profit. The total value of Facebook shares owned by Zuckerberg is now around $84.1 billion at their price of $204.87.
This move by FTC was meant to hit the social media behemoth hard enough for mishandling their users’ data. Nobody, however, thought it would turn into a profit for Zuckerberg.
It is also being reported that some analysts looked into the matter and said the whole incident appears to be a green light for Facebook to continue further unchecked. Analyst Daniel Ives of Wedbush said, “This closes a dark chapter and puts it in the rear-view mirror with Cambridge Analytica.
Facebook has got a few privacy breach issues in its bag recently. Now the question is, after such a massive fine which has hardly made any dent, will there be any further actions against this privacy mishandling issue by Facebook? Moreover, are these fines doing any good to solve users’ privacy concerns? Have the tech giants like Facebook got a free ride to misuse, abuse or pass on customers’ sensitive personal data to companies across the world? Authorities like FTC must answer to such questions!