"But this can not be at the expense of transparency, fairness and compliance with the law", ICO's information commissioner, Elizabeth Denham, said in a statement.
Denham also called for the government to introduce a statutory code of practice for the use of personal data in political campaigns, adding that "this can not be at the expense of transparency, fairness and compliance with the law".
Her office is leading the European investigations into how such an amount of data - most belonging to U.S. and United Kingdom residents, she says - could have ended up in the hands of a consulting firm that worked on Donald Trump's USA presidential campaign.
She said: "We are at a crossroads".
It is the largest possible penalty that can be handed out by Britain's information watchdog, which found the social media giant had broken the law by failing to safeguard millions of users' data.
A Facebook spokeswoman said the company was cooperating fully with an investigation by Australia's privacy commissioner.
"It shows the scale of the problem and that we are doing the right thing with our new data protection rules", she said.
Cambridge Analytica got the data of tens of millions of Facebook users from an academic who scraped the information with a personality quiz app. Facebook changed the policies that allowed this scraping in 2015, and told Cambridge Analytica to delete the data in the same year. "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", Denham said. Facebook initially said the scandal affected about 310,000 Australians in total.
"Facebook state that they only knew about this data breach when it was first reported in the press in December 2015".
That's why greater and genuine transparency about the use of data analytics is vital'.
The ICO's probe into whether political parties had used data manipulate the populous in the Brexit referendum was launched in March 2017, and later extended that to cover data analytics firms, data brokers and social media platforms.
Facebook's Egan referred to the numerous investigations involving the company.
Damian Collins, the chairman of the U.K. Parliament's media committee, said Wednesday that the company "should now make the results of their internal investigations known to the ICO, our committee and other relevant investigatory authorities".
"Facebook users will be rightly concerned that the company left their data far too vulnerable to being collected without their consent by developers working on behalf of companies like Cambridge Analytica".