FTC endorses roughly $5 billion USD Facebook settlement

The U.S. Federal Trade Commission (FTC) reportedly endorsed an approximately $5 billion USD (about $6.52 billion CAD) settlement with Facebook following a long-running probe into the social media giant’s privacy missteps.

According to the Wall Street Journal, FTC commissioners voted 3-2 in favour of the agreement. The Republican majority backed the endorsement while Democratic commissioners objected, according to reports. The matter has now moved to the Justice Department’s civil division, but it’s unclear how long it will take to finalize.

Justice department reviews are a standard part of FTC procedure, but usually don’t affect the outcome of the commission’s decision.

Along with the fine, the settlement is expected to tighten the U.S. government’s restrictions on Facebook and how it treats user privacy.

Back in April, Facebook expected to pay up to $5 billion USD to settle the FTC probe. Since then, the FTC’s resolution was bogged down by a party-line split as Democrats argued for stricter oversight. Another point of disagreement was to the extent to which Facebook’s CEO Mark Zuckerberg should be held responsible or made accountable for future missteps.

The FTC’s investigation began over a year ago after the Cambridge Analytica scandal, in which personal data from tens of millions of Facebook users ended up in the hands of the data firm, which worked on President Trump’s 2016 campaign.

Since that scandal, other privacy issues have come to light, furthering Facebook’s problems.

This settlement would exceed the previous record penalty for violating an FTC order, which was a $22.5 million USD (roughly $29.34 million CAD) fine against Google in 2012.

Despite the record settlement, Facebook’s shares gained 1.8 percent on July 12th as the company had previously set aside about $3 billion USD for the fine. Facebook’s profit for the first quarter of 2019 was slightly over $5 billion USD before accounting for the penalty.

Source: Wall Street Journal