How Facebook fought back on FTC fine

Facebook argued that none of its users were harmed as a result of the Cambridge Analytica scandal in a memo the company sent to the Federal Trade Commission (FTC) in the months before the agency announced a $5 billion fine over the incident.

The Hill obtained the memo on Monday in response to a Freedom of Information Act request for communications between the FTC and Facebook ahead of their $5 billion settlement.

The records show that during the months-long negotiations between the two sides, Facebook’s lawyers at the law firm Gibson Dunn wrote a white paper in response to a proposed fine from agency staff that they considered excessive. Many of the documents were redacted, so it’s unclear how large of a fine the FTC staffers had initially proposed, or whether it was equal to or exceeded the $5 billion amount that ultimately ended up in the settlement.

But the white paper makes it clear that Facebook found the sum to be over the top, arguing that the agency had failed to identify any harms to consumers that would warrant a large fine. Whatever the FTC staff had proposed was “unconstitutional” and wouldn’t stand up in court given the facts of the case, Facebook argued in the February 28 memo.

“In contrast, the proposed complaint does not allege that Facebook’s conduct resulted in any concrete consumer harm—neither ‘economic’ nor ‘physical.’” the white paper reads. “And, in fact, there was no consumer harm at all.”

The FTC announced the eventual $5 billion settlement with Facebook in July, settling allegations that the social media platform had violated a previous privacy settlement from 2012 by deceiving users about the extent to which they could shield their personal information.