FTC approves $5 billion Facebook settlement in privacy violation probe
The Federal Trade Commission has reportedly voted to approve fining Facebook roughly $5 billion to settle an investigation into the company’s privacy violations that was launched following the Cambridge Analytica scandal.
As per the reports, the settlement was approved along party lines, with the FTC’s three Republicans supporting it and two Democrats against it. This will now put an end to a wide-ranging probe into Facebook’s mishandling of users’ personal information that began more than a year ago.
Earlier this year, in April, Facebook said that it had set aside $3 billion as a part of an expected FTC fine. As per the reports, the settlement is expected to relate primarily to the last year’s Cambridge Analytica data privacy scandal, as well as the series of subsequent breaches and leaks that have dogged Facebook in the months since.
The investigation by FTC was launched in March 2018 after the Observer revealed that the political consultancy Cambridge Analytica had improperly obtained the private information of more than 50 million Facebook users.
Facebook had agreed under a 2012 consent decree stemming from a previous FTC investigation into privacy concerns to better protect user privacy. The investigation centered on whether this decree had been violated.
As a part of this agreement, Facebook will now reexamine the ways it handles user data, but the settlement will not restrict the company’s ability to share data with third parties. However, critics say the changes required of Facebook are not substantial enough, and the fine will hardly make a dent in Facebook’s bank account.
While this would be the largest ever fine levied by the FTC against a technology company, this is barely anything when compared to the company’s revenues. In the most recent quarterly earnings report, Facebook reported $15.1 billion in sales, 26% more compared to the previous year. At the time, $3 billion represented about 6 percent of the cash and marketable securities Facebook had on hand.
Currently, the fine of $22.5 million against Google holds that record of the largest fine by the FTC. However, the fine of $5 billion is unlikely to faze Facebook, which has reported record profits this year.