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Small figurines are visible in front of the Facebook logo on this illustration photo, April 8, 2019. REUTERS / Dado Ruvic / Illustration
July 13, 2019
By David Shepardson and Diane Bartz
(Reuters) – The US Federal Trade Commission this week approved a $ 5 billion settlement with Facebook Inc. over its investigation of user data processing by the social media company, a familiar source said Friday. .
The FTC has investigated allegations that Facebook has mistakenly shared information belonging to 87 million users with the now – defunct British policy consultancy firm Cambridge Analytica. The investigation focused on whether data sharing violated a 2011 consent agreement between Facebook and the regulator.
Investors applauded the news of the operation and pushed Facebook's shares up 1.8%, while several powerful Democratic lawmakers in Washington condemned the proposed sanction as inadequate.
The FTC should include in the agreement other restrictions on how Facebook treats users' privacy, according to the Wall Street Journal, which also said the agency's vote was going into the Party sense, with three Republicans voting to approve it and two opposing Democrats.
The settlement would be the largest civil sanction ever imposed on the agency.
The FTC and Facebook declined to comment.
Representative David Cicilline, a Democrat and chairman of a congressional antitrust group, called the $ 5 billion "Christmas gift five months earlier" penalty.
"This fine is a fraction of Facebook's annual income, which will not make them think twice about their responsibility to protect users' data," he said.
Facebook's revenue for the first quarter of this year amounts to $ 15.1 billion and its net profit to $ 2.43 billion. It would have been higher, but Facebook has set aside $ 3 billion for the fine imposed by the FTC.
Although the agreement resolves a major regulatory problem for Facebook, the Silicon Valley firm still faces potential new antitrust investigations as the FTC and the Department of Justice undertake a broad review of competition between America's largest technology companies.
It also faces public criticism by President Donald Trump and others over his cryptocurrency bill, Libra, regarding privacy and money laundering concerns. .
Cambridge Analytica's missteps, as well as anger over hate speech and misinformation on his platform, also prompted calls from presidential nominees Senator Elizabeth Warren to a co-founder of Facebook. , Chris Hughes, for the government to force the social media giant to sell Instagram, bought in 2012, and WhatsApp, bought in 2014.
But the company's core business has been resilient, with Facebook canceling its earnings estimates over the past two quarters.
Although the details of the deal are unknown, in a letter to the FTC earlier this year, Senators Richard Blumenthal, Democrat, and Josh Hawley, Republican, told the agency that even a fine $ 5 billion in civilian life was too low and senior officials, including potential founder Mark Zuckerberg, should be held personally liable.
Democratic FTC member Rohit Chopra said the agency should hold leaders accountable for violations of the consent decrees if they participated in these violations. Chopra did not respond to requests for comments on Friday.
The settlement is yet to be finalized by the civilian division of the Ministry of Justice and a final announcement could be announced as early as next week, the source said.
A well-informed source on settlement negotiations had announced to Reuters in May that any deal would put Facebook under 20 years of supervision.
(Report by David Shepardson and Diane Bartz in Washington and Shanti S Nair in Bengaluru, edited by Shounak Dasgupta, Rosalba O'Brien and Daniel Wallis)
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