Switzerland’s data privacy watchdog, the Federal Data Protection and Information Commissioner (FDPIC), has revealed that Facebook has yet to respond to an information request sent regarding its Libra cryptocurrency project.
According to FDPIC, the information request was sent on July 17 to the Libra Association. The Geneva-based Libra Association is in charge of developing and managing Facebook’s planned cryptocurrency.
The privacy watchdog’s letter to the association was in response to remarks made by the co-creator of Libra, David Marcus while testifying to U.S. Congress last week. During the hearings, Marcus mentioned that the data watchdog would have a significant role in the development of Facebook’s cryptocurrency.
Swiss Data Watchdog Has Hands Full Now
Consequently, the FDPIC commissioner is interested in knowing the level of responsibility to expect with regard to the Libra cryptocurrency project. According to an FDPIC press release:
"The FDPIC stated in his letter that as he had not received any indication on what personal data may be processed, the Libra Association should inform him of the current status of the project so that he could assess the extent to which his advisory competences and supervisory powers would apply."
During testimony last week, U.S. legislators continuously and consistently raised concerns that Facebook’s history of data privacy violations made the social media firm unsuited to launch a cryptocurrency that will be used by over two billion of its members.
Facebook – a Toddler Playing with Fire
Comparing Facebook to a ‘toddler’ holding a "box of matches," Senator Sherrod Brown questioned whether users should trust the social media platform with "their bank accounts and their money."
In defense of the cryptocurrency, Marcus argued that financial data of Libra users would be kept separate from their social media data, saying:
"To earn people's trust we will have the highest standards for privacy. The way we've built this is to separate social and financial data."
The conversation was thoughtful and highlighted important issues we, and the @Libra_ Founding Members, will need to address. I want to reiterate here what I said before the Committee: We will take the time to get this right.
— David Marcus (@davidmarcus) July 16, 2019
The $5 Billion Fine
Still, Facebook will have to do a lot of work to win over skeptics given that its data practice issues never seem to leave the spotlight. Just this week the U.S. Federal Trade Commission officially announced that it had slapped a $5 billion fine on Facebook over the company's privacy practices. The fine, which is the biggest ever slapped on a tech firm by the FTC, constitutes just about nine percent of Facebook’s 2018 revenues.
Besides paying the fine, Facebook will also be required to form an independent privacy committee on its board. The committee will operate independently of the tech firm’s CEO Mark Zuckerberg. The CEO will also be required, alongside designated compliance officers, to report on a quarterly basis to the FTC acknowledging that Facebook is complying with the FTC order.
— MoNoico (@monoico_com) July 24, 2019
Though it’s a lesser amount, Facebook has also been fined $100 million by the U.S. Securities and Exchange Commission. This is over accusations that it misled investors regarding the risks the company faced for violating user data policies.