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Facebook to Pay $5 Billion Fine to Settle FTC Privacy Investigation


After months of negotiations, the United States Federal Trade Commission (FTC) has approved a record $5 billion settlement with Facebook over its privacy investigation into the Cambridge Analytica scandal.

The settlement will put an end to a wide-ranging probe that began more than a year ago and centers around the violation of a 2011 agreement Facebook made with the FTC that required Facebook to gain explicit consent from users to share their personal data


SAN FRANCISCO — Facebook is on the cusp of a record-setting $5 billion government settlement over its handling of user data, according to a person familiar with the deal, a payment that would dwarf previous agreements and offer the clearest indication yet of Washington’s growing interest in reeling in big tech.

But the deal could also leave Facebook relatively unscathed depending on the details of the terms, which have yet to be announced. On Friday, consumer advocates and tech industry critics denounced the deal as being too soft on Facebook, though the company faces further investigation and litigation from state attorneys general as well as governments in Europe.

The Federal Trade Commission voted behind closed doors this week to approve the $5 billion settlement with Facebook over a series of privacy issues, according to a person familiar with the agreement who was not authorized to speak publicly. The vote was originally reported by The Wall Street Journal.

The terms of the potential settlement were not immediately known. A representative for Facebook declined comment.

Two key questions during negotiations have been to what extent Facebook CEO Mark Zuckerberg would be required to take personal responsibility for the company’s privacy practices, and whether the FTC would require major changes to how Facebook collects and uses personal information to create personalized advertisements.

The vote by the FTC was 3-2 along party lines, as the Republican majority approved the settlement while Democratic commissioners opposed it, according to the Journal report.

The matter was undergoing a review by the Justice Department, which typically does not change the outcome of FTC decisions, the Journal reported.

The FTC did not immediately respond to a request for comment.

The FTC has been investigating Facebook after several privacy missteps, including the company’s acknowledgement that the personal information of millions of users was obtained by Cambridge Analytica, a political consulting company that did work for President Donald Trump’s 2016 campaign.

The focus of the FTC’s interest has been whether Facebook has lived up to the terms of an earlier settlement from 2011 in which the social media giant promised not to mislead users about its privacy practices.

Though a $5 billion payment would take a lump out of Facebook’s cash pile, investors reacted positively to the potential end of the long-running investigation. Shares in Facebook rose about 1.5 percent after news of the vote broke.


The FTC launched an investigation into the social media giant last year after it was revealed that the company allowed Cambridge Analytica access to the personal data of around 87 million Facebook users without their explicit consent.

Now, according to a new report published by the Wall Street Journal, the FTC commissioners this week finally voted to approve a $5 billion settlement, with three Republicans voting to approve the deal and two Democrats against it.

Facebook anticipated the fine to between $3 billion and $5 billion and already had set aside $3 billion for the fine this spring when the company released its first quarter 2019 financial earnings report.

Despite all criticisms Facebook recently faced over its mishandling of users' data, the company's earnings and user base are continually increasing, with Facebook bringing in over $15 billion in revenue for the first quarter of 2019 alone. The social media network also added 39 million daily active users to its platform.


The FTC has not announced the settlement deal publicly, as the agreement still needs approval from the U.S. Department of Justice.

Not just FTC, UK's Information Commissioner Office (ICO) has also imposed £500,000 (over $628,000) fine on Facebook over the Cambridge Analytica scandal.


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