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Facebook hit with $5bn FTC fine

(Image credit: Image Credit: Katherine Welles / Shutterstock)

Facebook has officially been served with a $5bn settlement from the US Federal Trade Commission (FTC) in connection to the privacy fiasco surrounding Cambridge Analytica.

Besides the financial punishment, the company will also need to make a few changes in its consumer privacy practices, as well as privacy-related decision making.

After the Cambridge Analytica  scandal went public, the FTC launched an investigation, whose conclusion was that the social media giant used “deceptive disclosures and settings to undermine users’ privacy preferences”. That means that apparently, the company violated the agreement it had signed with the FTC back in 2012. The FTC also claimed that Facebook dealt with privacy-violating apps inadequately.

"These tactics allowed the company to share users' personal information with third-party apps that were downloaded by the user's Facebook 'friends,'" the agency said. "The FTC alleges that many users were unaware that Facebook was sharing such information, and therefore did not take the steps needed to opt-out of sharing."

Besides the mouth-watering fine, Facebook will also need to conduct a privacy review of every new product, service or practice, before it decides to launch it on the market. It will also need to establish an independent privacy committee, with the purpose of, among other things, making sure company CEO Mark Zuckerberg is not the only person making decisions regarding user privacy.

The company will also need to designate compliance officers that will report to the FTC every quarter, to make sure the social media does as it’s told.