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Facebook will reportedly be fined a record $5 billion over privacy mishaps

13 July 2019

Facebook declined to comment on the Journal's report of the FTC fine; the FTC did not immediately respond to messages for comment from the Associated Press.

The Federal Trade Commission's approval of a $5 billion settlement with Facebook sent shares in the tech giant up 1% in the final minutes of Friday's trading session.

While that's still only a fraction of Facebook's revenue, it's a more sizable hit than we often see in these situations. The commissioners voted 3-2 along party lines, with the majority Republicans voting to approve; Democratic members had sought tougher oversight. The WSJ says "other government restrictions" have likely been included in the settlement, but they were unable to find out what said restrictions might be.

"The matter has been moved to the Justice Department's civil division, and it is unclear how long it will take to finalize", the Journal wrote. Numerous company's critics - including the two Democratic commissioners who voted against it - felt it didn't go far enough, pushing for the agency to actively rein in Facebook's abuses lest other companies follow its example. Democrats have previously argued that a $5 billion fine is much too small given Facebook's history. The penalty against Facebook would be larger than the record-setting $22.5 million the FTC imposed on Google in 2012.

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But the deal may also include other government restrictions on how Facebook handles and regulates user privacy.

The FTC has been investigating allegations Facebook inappropriately shared information belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica. But it won't make much of a dent for Facebook, which had almost $56 billion in revenue previous year. Nevertheless, its controls have remained leaky.

No wonder Facebook's share price is actually up right now to $205.28 apiece.

Wall Street appeared unfazed at the prospect of the fine. The stock is up more than 50 percent since the beginning of the year.

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"Investors still had lingering worries that the fine might not be approved".

Representative David Cicilline, a Democrat and chair of a congressional antitrust panel, called the $5 billion penalty "a Christmas present five months early". It's very disappointing that such an enormously powerful company that engaged in such serious misconduct is getting a slap on the wrist.

Former FTC officials told CNN Business the agency would feel more pressure to make a statement with its fine against Facebook in light of all the public attention the company's data privacy scandals have received.

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Facebook will reportedly be fined a record $5 billion over privacy mishaps