Facebook to pay $5bn FTC fine

The fine resolves the FTC’s investigation into Facebook’s privacy practices. The probe began in March 2018, following the Cambridge Analytica revelations, and was focused on whether the social network’s sharing of data had violated a 2012 agreement with the FTC.

Facebook must also restructure its approach to privacy, according to the settlement order announced by the FTC yesterday ( 24^th July).

The penalty is the largest ever levied on any company for violating consumers’ privacy, the FTC said. 

Facebook posted advertising revenue of $16.6bn in its second quarter results, released yesterday.

Joe Simons, chairman of the FTC, said in a statement: "Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices. The magnitude of the $5bn penalty and sweeping conduct relief are unprecedented in the history of the FTC.

"The relief is designed not only to punish future violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations. The Commission takes consumer privacy seriously, and will enforce FTC orders to the fullest extent of the law."

Facebook has agreed to pay the fine. Addressing staff at a company-wide meeting, chief executive Mark Zuckerberg said: "Privacy is more central than ever to our vision for the future, and we’re going to change the way we operate in the whole company, from the leadership down and the ground up. We’re going to change how we build products, and if we don’t, we’re going to be held accountable for it."

In its second quarter results, Facebook said it was notified by the FTC in June that it has begun an separate anti-trust investigation into the company. It is also facing new scrutiny from the US justice department, which is looking into its practices as part of a broader anti-trust review of big tech companies.

Separately, the Securities and Exchange Commission (SEC) said Facebook had agreed to pay a $100m fine to settle charges for “for making misleading disclosures regarding the risk of misuse of Facebook user data”.