The U.S. Federal Trade Commission (FTC) has reportedly imposed a fine of $5 billion to Facebook for not being able to protect its users' privacy, the Wall Street Journal reported.
The FTC approved the settlement by a 3-2 vote along party lines with Republicans in favor and Democrats against
The FTC has now transferred the matter to the Justice Department's civil division for final approval, internal sources confirmed. The proposed amount is more significant than the record-setting $22.5 million the FTC fined Google in 2012. If approved, the fine would represent nearly 9% of Facebook's 2018 revenue.
Facebook and FTC have not yet commented on the news. However, earlier this spring, Facebook had already informed its shareholders that it expected a federal fine of $3 billion to $5 billion.
The proposed fine faced a wave of criticism. According to Democratic Rep. David Cicilline (R.I.), chairman of the House Judiciary antitrust subcommittee, the FTC just made Facebook an early Christmas gift.
Sen. Mark Warner (D-VA) added to the discussion saying that the financial penalty would not be enough given Facebook's track record of repeated privacy violations. Sen. Warner emphasized that the Congress needs to act to come up with fundamental structural reforms.
The consumer rights advocacy group, Public Citizen's president Robert Weissman, was also not satisfied with the FTC decision. In his opinion, an adequate settlement would have included a real restraint on the company's going forward. At first place, as a part of the current solution the FTC should have ordered Facebook to cancel its plans to integrate Messenger, Instagram, and WhatsApp, Weissman suggested.
Democratic presidential candidate Elizabeth Warren commented that Facebook was the biggest winner from the FTC settlement, pointing out that Marc Zuckerberg's firm made $5 billion in profits in the first three months of 2018. In her view, the trade commission let the social media giant walk off easily from the privacy scandal. Sen. Warren also used the chance to repeat her ongoing calls for breaking up tech giants.
The FTC began probing Facebook more than a year ago, following a series of reports that the political data company Cambridge Analytica improperly obtained information of 87 million users.
The primary concern of the federal agency was that Facebook had violated the terms of a 2011 agreement, according to which the social media firm had to inform users when their data was being shared with third parties.
Do you support or oppose the Democratic Rep. David Cicilline that the FTC has made Facebook an early Christmas gift?