The Federal Trade Commission voted this week to approve a roughly $5 billion settlement with Facebook that could end an investigation into its privacy practices, according to a person familiar with the matter but not authorized to speak on the record, a deal that could result in unprecedented government oversight of the company.
The settlement adopted with the FTC’s three Republicans supporting it and two Democrats against it — could end a wide-ranging probe into Facebook’s mishandling of users’ personal information that began more than a year ago.
The FTC’s $5 billion punishment against Facebook sets a new record as the largest penalty ever assessed against a tech company that broke a past promise to the government to improve its privacy practices.
The matter from here rests in the hands of the Justice Department, which typically must finalize FTC settlements, though DOJ rarely has upended them.
Facebook warned investors earlier this year it could face an FTC fine as high as $5 billion. Wall Street appeared to reward the company for setting aside a large portion of that penalty earlier this year, as the company’s stock rose almost 2 points following news of the settlement Friday.
The FTC declined to comment on the matter. Facebook also declined to comment.
The FTC opened its investigation into Facebook in March 2018, responding to reports that the political consultancy Cambridge Analytica improperly accessed personal data of 87 million Facebook users, which critics charged had violated an agreement Facebook brokered with the FTC in 2011 to protect users’ privacy.
Under the FTC’s new settlement, the consequences for Facebook could be vast: The tech giant may have to document every decision it makes about data before offering new products, keep closer watch over third-party apps that tap users’ information, and require its top executives, including Facebook CEO Mark Zuckerberg, to attest that the company adequately has protected privacy. Facebook had agreed to broad contours of those terms as part of confidential settlement talks with the FTC, the Post reported earlier this year.