Facebook finds itself in a tough situation. Bad press isn’t the only fallout from the company’s notorious data leak scandal. At present, representatives of the social media giant are speaking with people from the U.S. government. Facebook isn’t talking about working on a new government project. Instead, negotiators are working on a dollar figure for a forthcoming fine. Based on reports, Facebook won’t negotiate a slap on the wrist. The final sanction looks to be a multi-billion dollar fine.
One reason the company faces tremendous fines centers on Facebook’s violation of terms of a previous settlement agreement. In a 2011 settlement, Facebook was banned from “mispresenting the privacy or security of user information.” The infamous Cambridge Analytica scandal pulled the covers away from Facebook’s violation of the agreement. Specifically, Facebook shared information from more than 80 million users with the Cambridge Analytica consulting firm.
Why Facebook chose to violate the agreement is unknown. The decision to share private information with Cambridge Analytica may go down in corporate history as a historic ill-advised decision. Facebook’s brand and reputation suffers immensely in the fallout.
And then there is more trouble brewing for Facebook.
Facebook also faces pressure to police its content regarding “anti-vaccination” posts. Concerns about free speech arise here, but free speech rights come into play when the government seeks to censor. A private company such as Facebook can ban specific content. No easy answers exist for Facebook though. Allowing “anti-vax” posts angers some, banning the posts angers others. Facebook doesn’t need any more controversy after the impending news of a record-setting fine hits the press. Escaping controversy doesn’t seem to be in the company’s future.
Near the close of business on 2/15/2019, Facebook’s stock price dropped to $161.72. A massive fine could potentially bring the dollar amount down much further.