Facebook to pay FTC $5bn fine over Cambridge Analytica

$5 billion Facebook fine would be the largest ever penalty imposed by the FTC

The US Federal Trade Commission (FTC) has approved a $5 billion settlement with Facebook over the sharing of data with political consultancy Cambridge Analytica.

The FTC opened its investigation in March last year following claims that data from approximately 87 million Facebook users had been acquired by Cambridge Analytica. The FTC's probe has largely focused on whether the sharing of users' data violated a 2011 agreement between the regulator and the company.

The penalty will mark the largest in the FTC's history by a large margin, according to Reuters, if agreed by the civil division of the US Department of Justice. It would also set a new bar for privacy enforcement by US regulators, who have hitherto only brought a handful of cases against big tech firms.

In March 2018, several news outlets reported that Cambridge Analytica had collected the data of millions of Facebook users.

The company had purchased the data from an academic who had created a quiz app that was also able to collect personal information, not only from consenting users, but also their Facebook friends, without their knowledge.

The access to data in this was only cut in 2015 after Facebook belatedly amended this feature.

However, the FTC believes that this contravened a 2011 agreement whereby Facebook had promised not to share users' data with third parties without their knowledge and consent. This had followed earlier data sharing scandals at Facebook.

According to some reports, the FTC agreed several months ago to impose a sizable fine against Facebook, but the members of the commission had divided opinions about the scope and size of the punishment. One of the contentious issues to address was whether Facebook CEO Mark Zuckerberg should be held liable for the alleged violation of the 2011 agreement.

Last week, US President Donald Trump accused Facebook and several other social media companies of being unfair and biased against conservatives. He also criticised Facebook's Libra cryptocurrency project.

For man, though, the $5 billion fine is still too small for a company the size of Facebook. "This reported $5 billion penalty is barely a tap on the wrist, not even a slap," said Senator Richard Blumenthal, a Connecticut Democrat, according to Bloomberg.

"Such a financial punishment for purposeful, blatant illegality is chump change for a company that makes tens of billions of dollars every year," he added.

Marc Rotenberg, president of the Electronic Privacy Information Centre (EPIC), commented: "Something clearly has to be done to strengthen the data protection practices of that company."

Rotenberg's complaint against Facebook had led to FTC's 2011 deal with Facebook, addressing several deceiving practices of the social media company.