Facebook reportedly agrees to $5 billion FTC settlement

A Facebook logo and

The settlement is also expected to include new government restrictions on Facebook's user privacy policies.

The FTC's settlement was approved by a vote of 3-2, according to two people familiar with the matter.

The FTC started investigating Facebook past year after revelations surfaced that Cambridge Analytica, a United Kingdom political consultancy, accessed data from up to 87 million Facebook users without their permission. The settlement would easily surpass the FTC's largest financial penalty to date, which was a $22.5 million fine against Google in 2012. Since then, Facebook has also come under public scrutiny for offering more of its users' data to companies than it had previously admitted.

For now, the specifics of the settlement remain largely unknown, except for the figure which is believed to be in the region of $5 billion.

Facebook's settlement will now proceed to the Justice Department, which will review the FTC's decision and either sustain or challenge it.

The long-expected punishment, which Facebook is well prepared for, is unlikely to make a dent in the social media giant's deep pockets.

Representatives for Facebook and the FTC didn't immediately respond to requests for comment.


Even a record $5 billion penalty won't be too damaging a dent for Facebook, which made a profit of $22 billion past year on $56 billion in total revenue, or a profit margin of 45%.

"It's also clear that we're going to need Congress and the state attorneys general to take the mantle of any future antitrust investigation of Facebook because Trump's FTC appointees are not up to the task", Miller added.

Both incidents raised the prospect that Facebook had violated a 2011 consent agreement with the FTC which required the social network to have a "comprehensive privacy program" and to get the "express consent" of users before sharing their data.

Facebook declined to comment on the status of those probes.

In late April, Facebook told investors it was expecting a fine of $3 billion to $5 billion over its privacy scandals. Around the time the news broke this afternoon, Facebook share prices jumped from around $202 per share to $205.27, its highest price in the past year, and the sort of spike that often signals confidence from Wall Street.

FTC Commissioner Rohit Chopra, a Democrat, has said the agency should hold executives responsible for violations of consent decrees if they participated in the violations.

The FTC just gave Facebook a Christmas present five months early.

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