The US Federal Trade Commission (FTC) has reportedly agreed to a $5 billion settlement with Facebook to end its probe into the latter’s controversial privacy practices. According to The Wall Street Journal (WSJ), the 5-member FTC panel voted 3-2 to approve the deal, which now awaits the green signal from the US Justice Department. It is still unclear, however, as to what restrictions, if any, will be imposed on the social media giant as per the settlement. Both FTC and Facebook declined to comment on the story.
The fine, if finalized, would be the largest one the FTC has ever levied on a tech company, but it’s still less than 10 percent of the company’s annual revenue, which stood at a whopping $55.8 billion in 2018, per Statista. What’s more, the company already said in April that it was expecting to pay a $5 penalty to settle the probe. It also said that it had already set aside around $3 billion to settle the probe. The market had already factored in the penalty, and Facebook’s share closed 1.81 per cent higher on Friday.
A lot of observers have expressed their dissatisfaction with the penalty that they say is meager for the numerous privacy violations from the company over the years. Some even described it as an ’embarrassing joke’, and a ‘disproportionately modest fine’. US Congressman David Cicilline even contended that “The FTC just gave Facebook a Christmas present five months early”.
The FTC just gave Facebook a Christmas present five months early.
— David Cicilline (@davidcicilline) July 12, 2019
FTC initiated the investigation after a scandal involving former British consulting firm Cambridge Analytica, which was accused of illegally accessing data of more than 87 million Facebook users without their prior knowledge. FTC investigated whether Facebook’s data sharing with the British firm violated a 2011 consent agreement signed between Facebook and the regulator.