The Federal Trade Commission has reportedly slapped Facebook with a record-setting $5 billion fine over its privacy lapses, including a massive data leak to political research firm Cambridge Analytica.
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The staggering penalty, which was approved on a 3-2 vote with Republicans in support of it and Democrats against, according to the Wall Street Journal (paywall), dwarfs the previous record-holder, Google, which in 2012 was fined $22.5 million by the FTC for misleading users on how they could limit online tracking tools.
For Wall Street, however, the $5 billion figure looked like a slap on the wrist compared with fears that the regulator would impose an even harsher penalty.
Other possible remedies, according to analysts, included pressing for a possible breakup of the company, reversing its acquisitions of Instagram, WhatsApp, or both.
“They were one vote away from this being a Pandora’s Box situation,” Wedbush analyst Dan Ives told The Post. “It’s a relief for the Street, which was fearing the FTC situation was going to become a much broader inquiry with ramification beyond just a fine.”
In late April, Facebook told investors it was expecting a fine of $3 billion to $5 billion over its privacy scandals. At the time, Facebook said it had already set aside $3 billion toward the potential settlement last quarter.
The FTC opened its Facebook probe in March 2018, following reports that Cambridge Analytica had hoovered up the personal data of nearly 90 million Facebook users to better target them with political ads during the 2016 presidential election.
The investigation sought to determine whether Facebook violated the terms of a 2011 consent decree it signed with the FTC, which restricted the ways it could share users’ personal data.
Representatives for Facebook and the FTC didn’t immediately respond to requests for comment.
Facebook shares finished the day up 1.8%, at $204.87.
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