Facebook reportedly gets a $5 billion slap on the wrist from the FTC
The U.S. Federal Trade Commission has reportedly agreed to end its latest probe into Facebook‘s privacy problems with a $5 billion payout.
According to The Wall Street Journal, the 3-2, party-line vote by FTC commissioners was carried by the Republican majority and will be moved to the Justice Department’s civil division to be finalized.
A $5 billion payout seems like a significant sum, but Facebook had already set aside $3 billion to cover the cost of the settlement and the company could likely make up the figure in less than a quarter of revenue (the company’s revenue for the last fiscal quarter was roughly $15 billion). Indeed, Facebook said in April that it expected to pay up to $5 billion to end the government’s probe.
The settlement will also include government restrictions on how Facebook treats user privacy, according to the Journal.
We have reached out to the FTC and Facebook for comment and will update this story when we hear back.
Ultimately, the partisan divide which held up the settlement broke down with Republican members of the commission overriding Democratic concerns for greater oversight of the social media giant.
Lawmakers have been calling consistently for greater regulatory oversight of Facebook — and even a legislative push to break up the company — since the revelation of the company’s mishandling of the private data of millions of Facebook users during the run up to the 2016 presidential election, which wound up being collected improperly by Cambridge Analytica.
Specifically the FTC was examining whether the data breach violated a 2012 consent decree which saw Facebook committing to engage in better privacy protection of user data.
Facebook’s woes didn’t end with Cambridge Analytica . The company has since been on the receiving end of a number of exposes around the use and abuse of its customers’ information and comes as calls to break up the big tech companies have only grown louder.
The settlement could also be a way for the company to buy its way out of more strict oversight as it faces investigations into its potentially anti-competitive business practices and inquiries into its launch of a new cryptocurrency — Libra — which is being touted as an electronic currency for Facebook users largely divorced from governmental monetary policy.
Potential sanctions proposed by lawmakers for the FTC were reported to include the possibility of elevating privacy oversight to the company’s board of directors and potentially the deletion of tracking data; restricting certain information collection; limiting ad targeting; and restricting the flow of user data among different Facebook business units.
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