FTC reportedly settles with Facebook for $5B fine
The Federal Trade Commission (FTC) has reportedly approved a roughly $5 billion settlement with Facebook following its investigation into the company’s handling of the Cambridge Analytica scandal.
The Wall Street Journal, citing a person familiar with the matter, reported Friday that the FTC voted along party lines this week to approve the settlement, closing the investigation into the Cambridge Analytica incident.
The vote was 3-2, with Republicans in the majority approving the deal, according to the Journal.
The investigation was launched in March 2018 after reports that data from tens of millions of Facebook users was shared with the outside firm Cambridge Analytica. The agency had focused on whether Facebook violated a 2011 consent agreement with the FTC requiring greater privacy protections and transparency for users.
The FTC and Facebook both declined to comment. According to the Journal, the settlement now heads to the Department of Justice for review.
Why the settlement could bring more controversy: Facebook told investors earlier this year that it expected to pay between $3 billion and $5 billion to settle the investigation.
That admission worried the company’s biggest critics, including members of Congress, who argued that any sum in that range would hardly make a dent in Facebook’s bottom line and that the agency needed to impose severe penalties in order to change its behavior.
Though the fine would be the largest the FTC has ever imposed for privacy violations, it amounts to a fraction of the $55 billion in revenue Facebook generated last year.
In May, Sens. Richard Blumenthal (D-Conn.) and Josh Hawley (R-Mo.) wrote to the FTC saying that the sum Facebook expected to pay would be a “bargain” for the nearly $600 billion company and that the agency should consider holding individual executives responsible.
“Even a fine in the billions is simply a write-down for the company, and large penalties have done little to deter large tech firms,” the bipartisan duo wrote. “If the FTC is seen as traffic police handing out speeding tickets companies profiting off breaking the law, then Facebook and other will continue to push the boundaries.”
The Journal reported that the settlement will include “government restrictions on how Facebook treats user privacy” but it’s unclear what that would entail.
Facebook was also fined £500,000 last year by the UK Information Commissioner’s Office over the scandal, the largest penalty the office was authorized to levy.