Facebook (Meta) Fined $275 Million in Data Leak Case

There probably isn't going to be much holiday cheer decking the halls of Meta Platforms  (META) - Get Free Report this year.

The social media giant has suffered the slings and arrows of outrageous fortune for most of 2022, as its stock price fell and is market cap plummeted.

Earlier this month, the company said it would lay off around 11,000 people, or 12.5% of its global workforce, marking the first major round of job cuts in company history in the face of mounting losses in its metaverse project and a pullback in ad spending that continues to hit sales at its Facebook division.

Last month, Meta, which also owns Instagram and WhatsApp, posted weaker-than-expected second-quarter earnings and cautioned that its metaverse division would post deeper net losses over the coming year.

CEO Mark Zuckerberg has seen his personal wealth slide to a point where he is no longer in the Top 20 ranking of the world's richest people, according to Bloomberg Billionaires Index.

Yet he assured investors that the company was "approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company."

Meta has also had challenges on the regulatory front, most recently with Ireland's Data Protection Commission.

'A Bargain for Mark'

The agency said on Nov. 28 that it was fining Meta about $275 million for a data leak that resulted in the personal information of more than 500 million Facebook users being published online.

The commission has fined Meta a total of nearly $1 billion since last year.

The commission said in a statement that there was a comprehensive inquiry process, including cooperation with all of the other data protection supervisory authorities within the EU. 

"Those supervisory authorities agreed with the decision of the DPC," the agency said.

Irish regulators began their inquiry on April 14 following media reports about the discovery of a collated dataset of Facebook personal data that had been made available on the internet.

"So Ireland's DPC fined Meta €265 billion for leaking 533 million telephone numbers, e-mail addresses and, in some cases, the place of residence of users," one person said on Twitter. "That is roughly €0.50 per case. Just sayin'... a bargain for Mark."

Meta Platforms did not immediately respond to a request for comment, but the company told CNN that was it reviewing the DPC’s decision “carefully” and that it had cooperated fully with the agency’s investigation.

The company has said it believe that data had been scraped from Facebook profiles by "malicious actors."

In September, Irish regulators fined Meta about $400 million for its mistreatment of children’s data on Instagram. There was also an incident in March involving data breaches 

And last year, the commission whacked Meta for about $235 million, for violations related to its messaging service WhatsApp.

'Having it Both Ways'

Raji Srinivasan, a marketing professor at the University of Texas' McCombs School of Business, noted that European regulators are definitely less forgiving with data and privacy violations than their American counterparts.

Several big tech companies have offices in Ireland. including Alphabet  (GOOGL) - Get Free Report, Amazon  (AMZN) - Get Free Report, Apple  (AAPL) - Get Free Report, Intel  (INTC) - Get Free Report and Microsoft  (MSFT) - Get Free Report.

"A lot of these companies are cash rich," Srinivasan said. "They're sitting on a lot of cash and we also know why robbers rob banks-- because that's where the money is."

Irish regulators have been criticized for being too slow conducting investigations under the European Union's General Data Protection Regulation. 

"Ireland was trying to have it both ways in the sense that they were allowing whole lot of companies to come there to set up these tax free shell companies," Srinivasan said, "so obviously the Irish government doesn't want to punish these companies. But the EU is like, 'nothing doing, you are a part of our community.' " 

In addition to Ireland, regulators in the United Kingdom have been taking action against Meta.

Last month, an independent panel of the U.K. Competition and Markets Authority (CMA) said Meta's takeover of GIF-sharing platform Giphy could allow the company "to limit other social media platforms’ access to GIFs, making those sites less attractive to users and less competitive."

The CMA told the company that it had to sell GIF-sharing platform Giphy, which it purchased in 2020 for a reported $400 million.