Following an investigation conducted by the Federal Trade Commission into the Cambridge Analytica scandal and other complaints about infringements of users’ privacy, Facebook has reached a $5billion settlement with the organization. This is reportedly the 2nd highest fine ever paid by a tech company. In addition to paying this fine, Facebook will open up its business for increased scrutiny and greater restrictions. These measures will include third party assessments as well as privacy reviews of any new products or services. Certifications as to purposes and use of any data requested by other companies from Facebook must now be obtained as well. However, CEO Mark Zuckerberg and other top management staff will not be facing any personal sanctions or liabilities.
This settlement and some of its provisions could have greater implications for Facebook going forward, especially as it seeks to launch its native cryptocurrency called Libra. Key personalities in finance and government which include US Fed Chief Jerome Powell have expressed concerns over the potentially nefarious use of Libra and these privacy scandals that the company has had to endure over the last three years does little to help its cause before regulators.
Facebook has shed nearly $5.70 from its stock price as at the time of writing. The stock has rebounded slightly but is still under pressure. The daily chart shows a bearish engulfing pattern currently in evolution at the top of the trend. This means that further downside could be in the offing as we head to the end of Q2 2019.Don’t miss a beat! Follow us on Twitter.