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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Wall Street has approved a $ 5 billion fine for Facebook

Wall Street has approved a $ 5 billion fine for Facebook



The US government will impose a stunning $ 5 billion fine against Facebook for violating consumer privacy stemming from the Cambridge Analyzer scandal.

Facebook investors celebrate. Wall Street slightly increased the value of Facebook shares to nearly $ 205 after the news of the upcoming FTC punishment appeared this afternoon through the Wall Street Journal. Another way to say: Facebook investors were most optimistic about the company a year ago when they thought its shares worth $ 210. Now they also feel very good.

The most obvious reason for the cut is that Facebook has told investors it is expected to pay a fine of up to $ 5 billion and the company has set aside $ 3 billion, The dollar to pay the fine this spring.

The fact that while $ 5 billion is a very large number, and a giant for a fine FTC ̵

1; the next biggest fine that targets a Silicon Valley company is a $ 23 million slap-on-wrist for Google in 2012 – this is a great number for Facebook.

The company reported a profit of $ 22.1 billion last year. This year, even after reporting the fine, analysts believe they will earn more than $ 19 billion. By 2021, RBC analyst Mark Mahani believes Facebook should earn more than $ 35 billion a year.

But the biggest reason for optimism – from Wall Street's point of view – is that the federal government does not seem to move towards any other kind of regulation that would change the way Facebook manages its business, which depends on turning detailed information about its users in targeted advertising.

From the New York Times: "In addition to the fine, Facebook has agreed to carry out more comprehensive oversight of how it handles consumer data, according to [sources] But none of the terms in the agreement will limit Facebook's ability to collect and share data with third parties. "

This is: Facebook will have to set up more lawyers and other compliance experts once the FTC's new rules are official, but Facebook can hire many experts to comply with rules and lawyers The Facebook advertising machine that pays for them,

It is still possible to see bigger implications of the revelations about Cambridge Analytica, the data company that could invent data for tens of millions of Facebook users without their consent Facebook will continue to be subject to careful scrutiny outside of the US, and in the US, it receives repeated criticism from politicians across the spectrum: Thursday, for example, President Donald Trump and Federal Reserve Chairman Jerome Powell have attacked Facebook's plan to create its own digital currency.

And on Friday after the FTC Termination News gave up, Senator Mark Warner (D-VA) said the financial sanction was not big enough: "Given the recurrent Facebook privacy violation, it is clear that fundamental structural reforms are needed. Because FTC is either unable or unwilling to introduce reasonable safeguards to ensure the protection of privacy and user data, it is time for Congress to act. "

Facebook itself said it welcomed additional regulation (which is again in a position to deal with its huge resources). The company also said it is working on reorientation to focus on personal communications between its users – a move that is never connected directly with Cambridge Analytica and other privacy scandals, but we can connect ourselves points.


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