Federal Regulators Fine Facebook Up To $5 Billion Over Privacy Violations
Facebook faces a record-setting fine from the FTC for breaking a 2011 privacy agreement. The social media giant easily has the funds to cover the massive penalty.
Facebook expects to pay a fine of up to $5 billion in a settlement with the Federal Trade Commission over privacy violations. The tech giant discloses this estimated penalty in its first-quarter financial results as it concludes negotiations with federal regulators. The investigation focuses on Facebook breaking a 2011 consent decree where the company promises to give consumers clear notice and get express consent before sharing their data.
Experts point to the Cambridge Analytica scandal as a prime example of Facebook breaking its previous promises regarding user data. The company estimates the final penalty falls between $3 billion and $5 billion and currently sets aside $3 billion for the payment. Despite the massive size of this potential fine, it does not break records set by other FTC actions like the 2016 Volkswagen settlement.
Facebook reports over $15 billion in revenue for the first quarter, meaning the company easily has the financial resources to cover the penalty. CEO Mark Zuckerberg avoids discussing the settlement details during the earnings call and instead highlights future growth plans centered around private messaging. He also points to European privacy regulations as a model that could potentially work on a global scale.