The Washington Post and The Wall Street Journal both reported on Friday that the Federal Trade Commission (FTC) has approved a $5 billion Facebook settlement after a probe into its privacy practices. The tech company had previously told investors to expect a $3 billion to $5 billion fine.
Sources close to both media outlets say the FTC voted 3-2 in favor of settling the matter. Facebook, as well as the FTC, both declined to comment about the reports.
Just over a year ago, the FTC confirmed that it was investigating Facebook, following the Cambridge Analytica scandal which alleged that the personal data of millions of Facebook users had been compromised. After that, the social media giant has come other under scrutiny for sharing its users’ information with other companies. Cambridge Analytica shut down its operations in 2018 due to the allegations and other observations about its political influence. The company was offered political consulting work in America in exchange for using the data to influence voters.
Facebook was then accused of violating a 2011 consent agreement that it had with the FTC. The agreement called for Facebook to implement a comprehensive privacy program, which called for the company to obtain consent from its users before sharing any data.
The alleged settlement would be the largest penalty against any tech company. Other notable tech-related fines include Google’s $22.5 million in penalties in 2012.
In spite of the settlement, Facebook’s stock ended up almost 2 percent higher on Friday. But, the penalty against Facebook may not be the only action the FTC might take. The agency could decide to tighten its restrictions on Facebook’s user data policies, though additional measures weren’t reported on Friday.
The settlement must still go through the Justice Department before being finalized.