Facebook faces U.K. fine over privacy breaches

Penalty would be first tangible punishment for data scandal

LONDON— Facebook is facing its first financial penalty for allowing the political consultancy Cambridge Analytica to forage through the personal data of millions of unknowing Facebook users.

The social media giant faces a £500,000 ($870,000 Canadian) fine for failing to protect the personal information of its subscribers following an investigation into the Cambridge Analytica data harvesting scandal by the U.K. Information Commissioner’s Office (ICO).

The proposed fine announced Wednesday is the maximum possible for the scandal, which first broke in March. While the penalty is small for Facebook, it is a warning shot for companies that now face fines of up to 2 per cent of global revenue under European Union data protection regulations rolled out later, in May.

The announcement came after an investigation into Cambridge Analytica, which declared bankruptcy this year following allegations that it used personal information harvested from 87 million Facebook accounts to help Donald Trump win the 2016 presidential election. The data allegedly helped the Trump campaign target political advertising more accurately by giving them insight into what American Facebook users liked and disliked.

The ICO is also conducting a wider probe into the use of data analytics by other political campaigns.

“Fines and prosecutions punish bad actors, but my real goal is to effect change and restore trust and confidence in our democratic system,” information commissioner Elizabeth Denham said in a statement.

The penalty is a pittance for Facebook, which generates that sum roughly every seven minutes, based on its first-quarter revenue of $11.97 billion.

But it would represent the first tangible punishment for the company’s privacy scandal, which tarnished its reputation, temporarily pushed down its shares and forced CEO Mark Zuckerberg to testify before Congress, but otherwise led to few lasting repercussions.

The ICO announced its intention to fine Facebook after its investigation found that the company failed to safeguard users’ information and wasn’t transparent about how data was harvested by third parties. Facebook will have the chance to respond to the findings before the agency makes a final decision on penalties.

Denham’s office also published a progress report on the broader investigation, which includes a recommendation that the British government introduce a statutory code of practice for the use of data in political campaigns.

Cambridge Analytica, a London firm financed by Republican donors, worked for the 2016 Trump campaign and for a while employed Steve Bannon, later a White House adviser.

Companies face fines of up to 2 per cent of global revenue under new European Union data protection regulations