FTC Facebook settlement: $5 billion fine reported for user privacy violationsJuly 13, 2019
The Federal Trade Commission voted to approve a fine of roughly $5 billion against Facebook over user-privacy violations by the social media company that involved tens of millions of people, the Wall Street Journal reported Friday, citing an unnamed person familiar with the matter. The fine would be the largest the FTC has levied on a tech company.
The FTC started looking into Facebook last March, after news reports that Facebook had allowed Cambridge Analytica, a social media data firm that worked on President Trump’s 2016 campaign, to collect data from millions of users without their knowledge.
Seven years prior, Facebook had reached a settlement with the FTC after it was accused of making data public that it had promised would be private. As part of that settlement, Facebook agreed to ask for users’ permission before sharing their data more broadly than their privacy settings specified.
Facebook declined to comment on the Journal’s report of the FTC fine; the FTC did not immediately respond to messages for comment from the Associated Press. The Journal report says the 3-2 vote by FTC commissioners broke along party lines, with Republicans in support and Democrats in opposition to the fine.
The Journal says the FTC report has been moved to the Justice Department for review. In most cases the Justice Department’s civil division will review settlements by the FTC, and it is unclear how long the process would take. A Justice Department spokeswoman declined to comment on the Facebook matter.
Even a record $5 billion penalty won’t be too damaging a dent for Facebook, which made a profit of $22 billion last year on $56 billion in total revenue, or a profit margin of 45%. Facebookand said in April it was anticipating having to pay up to $5 billion.
Wall Street appeared unfazed at the prospect of the fine. Facebook’s shares closed at $204.87 on Friday and added 24 cents after hours. The stock is up more than 50 percent since the beginning of the year.
“This closes a dark chapter and puts it in the rearview mirror with Cambridge Analytica,” said Wedbush analyst Daniel Ives. “Investors still had lingering worries that the fine might not be approved. Now, the Street can breathe a little easier.”
The Journal report did not say what else the settlement includes beyond the fine, though it is expected to include limits on how Facebook treats user privacy. Some have called on the FTC to hold Facebook CEO Mark Zuckerberg personally liable for the privacy violations in some way, but based on the party line vote breakdown experts said this is not likely.
Marc Rotenberg, president of the…