Risk & Compliance

Facebook Hit with Record $5B Fine Over Privacy Breaches

The Federal Trade Commission’s settlement resolves its investigation into how the company lost control over user data.
Facebook Hit with Record $5B Fine Over Privacy Breaches

The Federal Trade Commission fined Facebook $5 billion and ordered the company to take steps to improve its oversight of users’ personal data as part of a settlement.

The fine, approved in a 3-to-2 vote by FTC commissioners this month, was a record by the federal government against a tech company.

Under the settlement, Facebook agreed to create an independent privacy committee on its board, assign compliance officers who would oversee a privacy program, undergo regular audits of privacy issues, and appoint an outside assessor to monitor data-handling. Chief executive officer Mark Zuckerberg agreed to submit to the assessments of the outside monitor.

A Better Way to Do Ecommerce

A Better Way to Do Ecommerce

Learn how Precision Medical leveraged OneWorld to cut the cost of billing in half and added $2.5M in annual revenue.

The fine stems from Facebook’s violation of a 2011 privacy settlement.

In a statement, FTC’s Republican commissioners, including chairman Joseph Simons, said they were “proud” of the settlement, which, “will provide significant deterrence not just to Facebook, but to every other company that collects or uses consumer data.”

They also said the agency did not have enough evidence to pursue litigation and that concessions the company made were stronger than what might have resulted from a long court fight.

Two Democratic commissioners who dissented with the settlement decision said it should have gone further. “When companies can violate the law, pay big penalties, and still turn a profit while keeping their business model intact, enforcement agencies cannot claim victory,” commissioner Rohit Chopra said in his dissenting opinion.

In a related settlement, the Securities and Exchange Commission announced Facebook agreed to pay $100 million to settle charges it made misleading disclosures regarding the risk of misuse of Facebook user data, stemming from the use of Facebook data by Cambridge Analytica.

Facebook agreed to the entry of a final judgment of the $100 million penalty without admitting or denying the SEC’s allegations.

Facebook said it took a one-time charge of $3 billion in April in announcing its first-quarter results.

Chip Somodevilla/Getty Images