Facebook’s announcement of Libra late last month has spurred greater regulatory oversight of cryptocurrencies, with a particular eye on who may be bringing those cryptos into the larger payments ecosystem.
As noted in this space last week, the regulator who helms Germany’s Federal Cartel Office said that cryptos – in particular, those brought by large technology firms – should be examined by regulators over antitrust concerns. As stated by Andreas Mundt, the president of the German regulatory watchdog, said that examination of cryptocurrencies “could become a topic for us.”
This would not be the first time the Federal Cartel Office has focused on Facebook. As recently as February, the regulator ruled that the social media giant had to reduce data collection protocols; upon appeal by Facebook, the issue is now being decided by the German legal system.
The antitrust issues may play out, as Facebook has said Libra may be used to expand into areas like credit. As has been reported, the Calibra wallet is envisioned to help spur commerce through apps such as Facebook Marketplace and Instagram Checkout.
And, you’d be forgiven for thinking that regulatory news tied to commerce and payments would be termed “all Facebook, all the time.” In Italy, the country’s data protection regulator fined Facebook the equivalent of $1.1 million for violating Italy’s data privacy laws in the wake of the Cambridge Analytics scandal.
That scandal, of course, was itself tied to the misuse of the personal data of 87 million Facebook users.
As had been reported, the fine was relatively small, as it was tied to an offense that happened before the General Data Protection Regulation (GDPR) took effect. That regulation now means companies can be fined as much as 4 percent of annual turnover.
“We have said before that we wish we had done more to investigate claims about Cambridge Analytica in 2015. However, evidence indicates that no Italian user data was shared with Cambridge Analytica. Dr. Kogan only shared data with Cambridge Analytica in relation to U.S. users,” Facebook said in a statement. “We made major changes to our platform back then, and have also significantly restricted the information which app developers can access. We’re focused on protecting people’s privacy and have invested in people, technology and partnerships, including hiring more than 20,000 people focused on safety and security over the last year. We will review the Garante’s decision and will continue to engage constructively with their concerns.”
The fine from Italy’s regulators comes after U.K. authorities also hit the company with a fine of 500,000 British pounds tied to the Cambridge Analytica data controversy.
FDIC’s New Division
Beyond the confines of cryptocurrencies, the Federal Deposit Insurance Corporation (FDIC) said it will bring the supervision and resolution activities of large banks under the umbrella of a new division, known as the Division of Complex Institution Supervision and Resolution (CISR). That division, slated to debut on July 21, will monitor financial firms with more than $100 billion in assets.