Facebook facing millions of dollars in FTC penalties
CRACKING THE WHIP The firm could be fined up to $40,000 per violation a day WASHINGTON:
Former Federal Trade Commission (FTC) officials say that Facebook Inc. appears to have breached a 2011 consent agreement to safeguard users’ personal information and may be facing hundreds of millions of dollars in fines.
The agency could fine Facebook up to $40,000 per violation per day—which could add up quickly with millions of users involved—if it finds the social media giant broke its earlier promises to protect user data, they say.
“If I had to bet, they will find violations,” said Jessica Rich, a former head of the FTC’s consumer protection bureau.
“The penalty could potentially be huge,” because each user adversely affected could be considered a violation, said Rich, now vice-president of consumer policy and mobilization for Consumer Reports. “The FTC is unlikely to get billions,” Rich said. “It could get hundreds of millions.”
The FTC is probing how data from 50 million Facebook users was obtained by Cambridge Analytica, a British political consulting firm that consulted on President Donald Trump’s campaign, and whether the transfer violated pledges the company made to settle an earlier privacy case.
Investigators can also consider whether Facebook misled users or violated rules governing data shipments between Europe and the US.
“The agency has a fair amount of latitude to turn the screws up,” said David Vladeck, the former head of the FTC’s bureau of consumer protection who signed the consent order which binds Facebook for 20 years.
“This is in my view a serious breach of the FTC’s consent” agreement, Vladeck, now a Georgetown University professor, told Bloomberg TV. “There will be serious consequences from this violation.”
Facebook is struggling to respond to the Cambridge Analytica scandal, which has prompted an outcry from lawmakers, investors and privacy advocates. The crisis comes just a few months after revelations that Russia exploited Facebook’s platform to influence the US presidential election.
Congress is seeking to bring Facebook chief executive officer Mark Zuckerberg to Washington for public testimony. The scandal has caused Facebook to delay the unveiling of new home products and redesign its privacy settings. The stock has lost almost $100 billion in market value and is no longer among the top five most valuable companies in the world.
In the 2011 case, the agency alleged in an eight-count draft complaint that Facebook had broken its promise that users could keep their information on Facebook private.
Facebook had assured users that third-party applications only had access to data required for them to function, while, in fact, the applications had access to almost all of a user’s personal information.
Under the settlement, Facebook agreed to get consent from users before sharing their data with third parties. It also required Facebook to establish a “comprehensive privacy program,” block access to a user’s account within 30 days of it being deleted and barred it from making any deceptive claims about its privacy practices.
Facebook says it didn’t violate the consent decree. It has suspended Cambridge Analytica from its network and said in a blog post that the British company had received user data through an app developer in violation of Facebook policy.
“We remain strongly committed to protecting people’s information,” said Rob Sherman, deputy chief privacy officer at Facebook. “We appreciate the opportunity to answer questions the FTC may have.”
The Reserve Bank of India (RBI) has imposed a penalty of ₹58.9 crore on ICICI Bank Ltd for failing to adhere to its directives regarding the sale of securities from the held-to-maturity, or HTM, portfolio.
“The Reserve Bank of India has imposed through an order dated March 26, 2018, a monetary penalty of ₹589 million (or ₹58.9 crore) on ICICI Bank Ltd (the bank) for non-compliance with directions issued by RBI on direct sale of securities from its held-to-maturity portfolio and specified disclosure in this regard,” the central bank said in a statement on Thursday.
“This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the central bank’s statement added.
Banks hold debt securities in three categories, including heldto-maturity, available-for-sale (AFS) and held-for-trading (HFT).
Securities acquired with the intention of being held till maturity are classified under HTM.
If the value of sales of securities from HTM category exceeds 5% of the HTM investments, banks are required to disclose in the audited annual financial statements the market value of the HTM investments and indicate the excess of book value over market value.
MUMBAI: