Facebook was just slapped with a record-setting R69 billion fine for mishandling user data, but those users won't see a penny. Here's where that money goes.
- On Wednesday, the Federal Trade Commission slapped Facebook with a R69 billion fine plus a slew of regulations. It's one of the largest such fines in the FTC's history.
- The fine was imposed, "to settle Federal Trade Commission charges that the company violated a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information."
- So, where does that R69 billion fine go? Not to the deceived Facebook users, but to the United States Treasury.
- For more stories, go to Business Insider SA.
After months of rumors, Facebook was officially slapped with a massive fine on Wednesday morning: $5 billion (R69 billion) by the Federal Trade Commission.
It's one of the largest such settlements in American history, and it's one that's directly tied to mishandling consumer data.
As the FTC said in its announcement, the fine is intended, "to settle Federal Trade Commission charges that the company violated a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information."
So, where does that $5 billion (R69 billion) go? Not to any of the deceived Facebook users, but to the United States Treasury.
"By law, this money goes to the US Treasury," Federal Trade Commission associate director James Kohm said on Wednesday during a press conference in Washington D.C. "There's nothing else that can be done with the money, by law," he said. An FTC representative separately confirmed to Business Insider that the fine would go to the treasury.
Notably, that means the money won't go to any of the Facebook users who the FTC says were deceived by Facebook's handling of their personal data. There is no way to appeal to the United States Treasury for compensation.
Kohm said this is a measure of US law, and that other funds are occasionally used to compensate affected parties. "We often use redress funds to compensate injured consumers," he said. "Occasionally we will do consumer education, but when there is a civil penalty that needs to go to the United States Treasury."
Facebook can certainly afford the fine - the company generates that much cash every 49 days.
The social media giant even took the potential for such a penalty into account, and the company's stock actually increased in value following initial reports of the anticipated $5 billion (R69 billion) fine.
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