Britain to fine Facebook over data breach

Facebook has admitted that up to 87 million users may have had their data hijacked by British consultancy firm Cambridge Analytica, which was working for US President Donald Trump’s 2016 campaign. (AFP)
Updated 11 July 2018

Britain to fine Facebook over data breach

  • The watchdog said it plans to issue Facebook with the maximum fine available to it for breaches of the Data Protection Act
  • The British fine comes as Facebook faces a potential hefty compensation bill in Australia

LONDON: Britain’s data regulator has said it will fine Facebook half a million pounds ($660,000) for failing to protect users’ data, in an inquiry into whether personal information had been misused by campaigns on both sides of Britain’s 2016 EU referendum.
An investigation by the Information Commissioner’s Office (ICO) has focused on the social media giant since earlier this year, when evidence emerged that an app had been used to harvest the data of tens of millions of Facebook users worldwide.
In a progress report early Wednesday the watchdog said it plans to issue Facebook with the maximum fine available to it for breaches of the Data Protection Act.
“The ICO’s investigation concluded that Facebook contravened the law by failing to safeguard people’s information,” it said, adding that the company had “failed to be transparent about how people’s data was harvested by others.”
Facebook has admitted that up to 87 million users may have had their data hijacked by British consultancy firm Cambridge Analytica, which was working for US President Donald Trump’s 2016 campaign.
Cambridge Analytica, which denies the accusations, has since filed for voluntary bankruptcy in the United States and Britain.
“We are at a crossroads. Trust and confidence in the integrity of our democratic processes risk being disrupted because the average voter has little idea of what is going on behind the scenes,” Information Commissioner Elizabeth Denham said in the statement.
“New technologies that use data analytics to micro-target people give campaign groups the ability to connect with individual voters. But this cannot be at the expense of transparency, fairness and compliance with the law.”
In May, Facebook chief Mark Zuckerberg apologized to the European Parliament for the “harm” caused by a huge breach of users’ data and by a failure to crack down on fake news.
The EU in May launched strict new data-protection laws allowing regulators to fine companies up to €20 million ($24 million) or four percent of annual global turnover.
But the IOC said because of the timing of the incidents involved in its inquiry, the penalties were limited to those available under previous legislation.
The next phase of the ICO’s work is expected to be concluded by the end of October.
“As we have said before, we should have done more to investigate claims about Cambridge Analytica and take action in 2015,” Erin Egan, chief privacy officer at Facebook, said.
“We have been working closely with the ICO in their investigation of Cambridge Analytica, just as we have with authorities in the US and other countries. We’re reviewing the report and will respond to the ICO soon.”
The British fine comes as Facebook faces a potential hefty compensation bill in Australia, where litigation funder IMF Bentham said it had lodged a complaint with regulators over the Cambridge Analytica breech — thought to affect some 300,000 users in Australia.
IMF investment manager Nathan Landis told The Australian newspaper most awards for privacy breaches ranged between A$1,000 and A$10,000 ($750-$7,500).
This implies a potential compensation bill of between A$300 million and A$3 billion.


IMF downgrades outlook for world economy, citing trade wars

Updated 15 October 2019

IMF downgrades outlook for world economy, citing trade wars

  • Growth this year will be ‘weakest since the 2008 financial crisis,’ according to 2020 forecast

WASHINGTON: The International Monetary Fund is further downgrading its outlook for the world economy, predicting that growth this year will be the weakest since the 2008 financial crisis primarily because of widening global conflicts.

The IMF’s latest World Economic Outlook foresees a slight rebound in 2020 but warns of threats ranging from heightened political tensions in the Middle East to the threat that the US and China will fail to prevent their trade war from escalating.

The updated forecast released on Tuesday was prepared for the autumn meetings this week of the 189-nation IMF and its sister lending organization, the World Bank. Those meetings and a gathering on Friday of finance ministers and central bankers of the world’s 20 biggest economies are expected to be dominated by efforts to de-escalate trade wars.

The new forecast predicts global growth of 3 percent this year, down a 0.2 percentage point from its previous forecast in July and sharply below the 3.6 percent growth of 2018. For the US this year, the IMF projects a modest 2.4 percent gain, down from 2.9 percent in 2018.

Next year, the fund foresees a rebound for the world economy to 3.4 percent growth but a further slowdown in the US to 2.1 percent, far below the 3 percent growth the Trump administration projects.

IMF economists cautioned that that even its projected modest gains might not be realized.

“With a synchronized slowdown and uncertain recovery, there is no room for policy mistakes, and an urgent need for policymakers to cooperatively de-escalate trade and geopolitical tensions,” Gita Gopinath, the IMF’s chief economist, said in the report.

Last week, the US and China reached a temporary cease-fire in their trade fight when President Trump agreed to suspend a tariff rise on $250 billion of Chinese products that was to take effect this week. But with no formal agreement reached and many issues to be resolved, further talks will be needed to achieve any breakthrough. The Trump administration’s threat to raise tariffs on an additional $160 billion in Chinese imports on Dec. 15 remains in effect.

The IMF’s forecast predicted that about half the increase in growth expected next year will result from recoveries in countries where economies slowed significantly this year, as in Mexico, India, Russia and Saudi Arabia.

This year’s slowdown, the IMF said, was caused largely by trade disputes, which resulted in higher tariffs being imposed on many goods. Growth in trade in the first half of this year slowed to 1 percent, the weakest annual pace since 2012.

Kristalina Georgieva, who will preside over her first IMF meetings after succeeding Christine Lagarde this month as the fund’s managing director, said last week that various trade disputes could produce a loss of about $700 billion in output by the end of next year or about 0.8 percent of world output.

IMF economists said that one worrying development is that the slowdown this year has occurred even as the Federal Reserve and other central banks have been cutting interest rates and deploying other means to bolster economies.

The IMF estimated that global growth would have been about one-half percentage point lower this year and in 2020 without the central banks’ efforts to ease borrowing rates. “With central banks having to spend limited ammunition to offset policy mistakes, they may have little left when the economy is in a tougher spot,” Gopinath said.

In addition to trade and geopolitical risks, the IMF envisions
threats arising from a potentially disruptive exit by Britain from the EU on Oct. 31. The IMF urged policymakers to intensify their efforts to avoid economically damaging mistakes.

“As policy priorities go, undoing the trade barriers put in place with durable agreements and reining in geopolitical tensions top the list,” Gopinath said. “Such actions can significantly boost confidence, rejuvenate investment, halt the slide in trade and manufacturing and raise world growth.”

The IMF projected that growth in the 19-nation euro area will
slow to 1.2 percent this year, after a 1.9 percent gain in 2018. It expects the pace to recover only slightly to 1.4 percent next year.

Growth in Germany, Europe’s biggest economy, is expected to be a modest 0.5 percent this
year before rising to 1.2 percent next year.

China’s growth is projected to dip to 6.1 percent this year and 5.8 percent next year. These would be the slowest rates since 1990, when China was hit by sanctions after the brutal crackdown on pro-democracy demonstrators in Beijing’s Tiananmen Square.