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Facebook to Pay $5bn Fine Over Privacy Violations

The Facebook case is being looked at as a measure of the Donald Trump administration’s willingness to regulate US tech companies

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FILE - The logo for Facebook appears on screens at the Nasdaq MarketSite, in New York's Times Square, March 29, 2018. VOA

Facebook has reportedly reached a whopping $5 billion settlement with the US Federal Trade Commission (FTC) in the Cambridge Analytica privacy violations, the media reported.

FTC commissioners voted by 3-2 with Republicans in support and Democrats in opposition to the penalty, Xinhua news agency quoted a Wall Street Journal report as saying on Friday.

The personal data of over 87 million Facebook users were violated by the British political consultancy firm Cambridge Analytica.

The FTC opened a probe last year into the matter after the social networking giant admitted Cambridge Analytica acquired detailed personal information of more than 87 million Facebook users via an academic researcher.

The report of the $5 billion settlement, the largest ever by the FTC against a tech company over privacy issues after a $22.5 million settlement with Google in 2012, led to Facebook’s stock price rise on Friday.

The reason for the stock price surge was because the settlement money is hardly a quarter of Facebook’s annual profit that met with records this year.

The FTC also did not say anything about breaking up Facebook – a call that has been rising in the US political corridors.

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FILE – The Facebook logo is seen on a shop window in Malaga, Spain, June 4, 2018. (VOA)

The Facebook-FTC matter has now been moved to the US Justice Department for a review.

It is still unclear what restrictions are on Facebook’s handling of user privacy in the settlement. FTC and Facebook declined to comment on the story.

Battling several privacy violations, Facebook in April said it has kept aside $3-$5 billion, anticipating a record fine coming from the US FTC.

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“We estimate that the range of loss in this matter is $3 billion to $5 billion,” Facebook had said.

As part of its settlement with the US FTC, the social media giant has also been asked to “strengthen its privacy practices”.

The Facebook case is being looked at as a measure of the Donald Trump administration’s willingness to regulate US tech companies. (IANS)

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US Lawmakers Call Facebook’s Digital Coin Libra as ‘Delusional’

Under Facebook subsidiary Calibra, the social networking giant has planned to introduce a digital wallet for Libra. The wallet will be available on Messenger, WhatsApp and as a standalone app and is expected to be launched in 2020

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Bitcoin, which has risen in value for eight consecutive days, received a boost after Facebook has said it would offer its own cryptocurrency, the Libra coin by end of June 2020. Pixabay

The US lawmakers attacked Facebook’s upcoming digital cryptocurrency Libra at a Senate hearing here, calling it “delusional” and “dangerous” and directing the social networking giant to clean up its house first before launching a new business model.

David Marcus, Head of Facebook subsidiary Calibra, was grilled at the Senate Banking Committee on Tuesday, reports Tech Crunch.

Democrat Senator Sherrod Brown who began the hearing blasted Facebook, saying it was “delusional” to think people would trust it with their hard-earned money.

“We’d be crazy to give them a chance to let them experiment with people’s bank accounts,” said Brown, adding that “like a toddler who has gotten his hands on a book of matches, Facebook has burned down the house over and over and called every arson a learning experience.

Republican Senator Martha McSally echoed his views: “Instead of cleaning up your house, you are launching a new business model.”

Marcus said Facebook “will only build its own Calibra cryptocurrency wallet into Messenger and WhatsApp”.

Marcus told lawmakers that Libra – controlled by a non-profit called the Libra Association — will comply with all US regulations and unless all concerns are answered, would not be launched.

Earlier on Monday, US Treasury Secretary Steven Mnuchin said he was “uncomfortable” with Libra. US Federal Reserve Chair Jerome Powell has also raised “serious concern” over Libra.

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FILE – Representations of virtual currency are displayed in front of the Libra logo in this illustration picture. VOA

Marcus, in a prepared testimony, said the Libra Association would be regulated by the Swiss government because that’s where it’s headquartered.

“The Libra Association expects that it will be licensed, regulated, and subject to supervisory oversight. Because the Association is headquartered in Geneva, it will be supervised by the Swiss Financial Markets Supervisory Authority (FINMA),” Marcus wrote.

US President Donald Trump last week tweeted that he is not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.

“Unregulated Crypto Assets can facilitate unlawful behaviour, including drug trade and other illegal activity,” Trump said.

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“Similarly, Facebook Libra’s avirtual currency’ will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.

“We have only one real currency in the USA, and it is stronger than evera It is called the United States Dollar!” he further tweeted.

Facebook has said it is not going to launch its digital coin Libra unless regulators are fully satisfied and all necessary approvals are in place.

Under Facebook subsidiary Calibra, the social networking giant has planned to introduce a digital wallet for Libra. The wallet will be available on Messenger, WhatsApp and as a standalone app and is expected to be launched in 2020. (IANS)