Facebook said in April that it expected to pay billions to settle a Federal Trade Commission investigation into the Cambridge Analytica affair that exposed the personal data of millions of users. Now it looks like the social media company will be forking over $5 billion to answer for its indiscretions.
On Friday (July 12), the FTC voted to approve the $5 billion fine, the biggest FTC settlement by a magnitude of billions. Google paid the FTC $22.5 million in 2012 for violating a decree. That’s also the year Facebook entered into a consent degree with the FTC over — stop me if this sounds familiar — user privacy violations.
The $5 billion price for violating that decree is on the top end of what the FTC was expected to hand down as punishment. For context, Facebook recorded $15 billion in sales during the fiscal quarter that ended in March.
Two Democratic commissioners voted against the settlement, the details of which haven’t been disclosed. It’s likely that the nay votes were because those commissioners want tougher oversight of Facebook than the settlement allows.
The settlement will now be reviewed by the Department of Justice, though it’s unlikely that the DOJ will change the outcome of the terms.
What Facebook did wrong
Back in 2012, Facebook promised the FTC it would better protect user privacy after countless instances of the company failing to do so.
But then, in 2016, Facebook allowed Cambridge Analytica, a political data-mining firm, to scrape the data of 50 million users to help the campaign of now-president Donald Trump. The data-scraping was conducted under the guise of a study conducted by a Cambridge professor, and seemed on the up-and-up.
In 2018, it was revealed that the data was used for other purposes, and that Facebook didn’t do enough to close the pipeline of information that Cambridge Analytica had access to.
The fallout is ongoing, if today’s record-breaking fine is any indication. But Facebook is still in business, and $5 billion won’t even scratch the surface of the company’s coffers.