FTC reportedly approves $5B settlement with Facebook

Lloyd Doyle
July 13, 2019

The US Federal Trade Commission has approved a $US5 billion ($NZ7.4b) settlement with Facebook over its investigation into the social media company's handling of user data, a source says.

The settlement includes "government restrictions on how Facebook treats user privacy", Reuters and the Wall Street Journal reported citing sources familiar with the matter, without specifying what those restrictions might be.

The agency approved the settlement in a 3-2 vote along party lines, with the two Democrats voting against it, said the people, who would speak only the condition of anonymity. The FTC revealed that Facebook pay will pay a $5 billion fine, the largest ever levied by the commission against a tech company.

Since past year, following the Cambridge Analytica scandal, the FTC has been probing whether Facebook violated a 2011 privacy consent decree that obligated the company to take steps to protect its users' privacy.

Even a fine in the billions is simply a write-down for the company, and large penalties have done little to deter large tech firms.

The next stages will be handled by the Justice Department's civil division, though for now it remains unclear how long it will take to finalize.

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.

In late April, Facebook told investors it was expecting a fine of $3 billion to $5 billion over its privacy scandals. Democrats have previously argued that a $5 billion fine is much too small given Facebook's history.

Both incidents raised the prospect that Facebook had violated a 2011 consent agreement with the FTC which required the social network to have a "comprehensive privacy program" and to get the "express consent" of users before sharing their data.

Sean Moran is a congressional reporter for Breitbart News. For the first quarter of 2019, Facebook reported $15.08 billion in sales.

While the deal resolves a major regulatory headache for Facebook, the Silicon Valley firm still faces further potential anti-trust probes as the FTC and Justice Department undertake a wide-ranging review of competition among the biggest U.S. tech companies.

Marc Rotenberg, president of the nonprofit online privacy advocacy group Electronic Privacy Information Center, said he was "confused" as to why the Democratic commissioners didn't support the settlement and said he suspects, without having seen the actual settlement, that this was due to the Zuckerberg liability question.

Other reports by Iphone Fresh

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