Facebook's stock price jumped to its highest in a year after reports that the US Federal Trade Commission (FTC) voted for a record $US5 billion fine on Friday, which many have labelled a slap on the wrist.
The fine sees the end of the FTC’s investigation into the Cambridge Analytica scandal, which saw the barvesting of the personal data of millions of Facebook profiles without their consent for political advertising, which began in March 2018. It’s expected to be approved by the US Justice Department in the coming weeks according to reports.
The $US5 billion fine, which was anticipated by the tech company in its Q1 earnings reports, would be the largest the US government has handed a tech company, surpassing the $US22 million handed to Google in 2012.
However, many have criticised the figure, which represents roughly three months’ of revenue for the company, for not going far enough in punishing Facebook. In the first quarter of 2019, Facebook made $US15 billion in revenue and for 2018 it reported a profit of $US22 billion.
Rather than dent the tech giant, the fine has increased its value with Facebook’s stock rising by 1.8% on Friday to $US204.87. This is the highest it’s been since late July last year when it reached $US217.50.
A number of US politicians have criticised the fine, with one labelling it an early Christmas present to the company.
The FTC just gave Facebook a Christmas present five months early.
— David Cicilline (@davidcicilline) July 12, 2019
Let’s be honest: this settlement is a victory for Facebook. Just look to the markets. In the first 15 minutes after the settlement was reported, Facebook’s market value went up by more than $5 billion.
— Elizabeth Warren (@SenWarren) July 12, 2019
The FTC is set to begin an antitrust probe into Facebook, while in Australia the ACCC has handed its Digital Platforms inquiry to Treasurer Josh Frydenberg.
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