Could Facebook Face a $1 Trillion Fine?

Technically speaking, Facebook could actually face up to a $2 trillion fine.

Here’s how. Many readers have probably heard the story of how Cambridge Analytica harvested the data of 50 million Facebook users for political operations. Shady stuff, sure, but also potentially against the rules.

The Federal Trade Commission has a rule known as the “consent decree,” which states that users must explicitly give their consent if data about them is to be shared beyond the scope of what’s covered in their privacy settings. In this case, it seems fairly clear that sharing personal data with a third-party data firm (Cambridge Analytica) – whose goal it was to use the information to influence people for political reasons – violates the consent decree.

That’s where the numbers start to add up in a big way. According to the Washington Post, if Facebook is found to have violated the FTC consent decree, it could be fined up to $40,000 per violation. Multiply that figure by 50 million users, and you get your whopping $2 trillion fine.

No analyst really expects the fines to reach that level, or anywhere close to it. But the point is that Facebook could not only be facing substantial fines for this “breach of trust” (as Mark Zuckerberg put it), but they could also be at the cusp of heavy-handed regulatory action about how their company does business.

For all of these reasons, Facebook’s stock has taken a hit in the days following the story, wiping some $50 billion from their market cap in just two trading days. If the fallout continues and the government regulates Facebook in such a way that their revenue model is upended, it could potentially have a material impact on the stock going forward.

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