The US Federal Trade Commission (FTC) has approved a $5 billion settlement against Facebook for violating users’ privacy, several news organizations reported July 12.
Facebook expected it would have to pay up, and said in its April earnings report that it was setting aside $3 billion and that it was prepared for the amount to reach $5 billion. Even baking in that $3 billion for the FTC, Facebook reported one of its best quarters ever, and it seems unlikely that an additional $2 billion will slow the company down much further.
Although it’s the largest fine ever levied by the FTC against a tech company, it won’t significantly hurt the social media giant: it’s less than 1% of its roughly $580 billion market capitalization. The company’s stock price jumped about 2% to around $205 after the news.
The FTC began investigating the company after reports revealed in 2018 that it let the political data consultancy firm Cambridge Analytica suck up users’ data without their permission. It aimed to determine whether Facebook breached the terms of a 2012 consent decree with the agency. The Wall Street Journal (paywall), which first broke the news, citing an anonymous source, reported that the FTC’s commissioners voted along party lines, with the three Republicans supporting the settlement, and the two Democrats opposing it.
The deal will be finalized after it is reviewed by the US Justice Department, and it’s expected to have other, undisclosed restrictions on how Facebook “treats user privacy,” the Journal reported.