Facebook to be slapped with $5 billion fine for privacy lapses, say reports

Key Points

• The Federal Trade Commission announced a settlement with Facebook over the company’s 2018 Cambridge Analytica scandal.
• The fine represents the largest ever imposed by the FTC against a tech company.
• The FTC began probing Facebook in March 2018 following reports that political consulting firm Cambridge Analytica had improperly accessed the data of 87 million Facebook users.
  The Federal Trade Commission approved an approximately $5 billion settlement with Facebook over the company’s 2018 Cambridge Analytica scandal, a person familiar with the matter told The Wall Street Journal. Several other news outlets separately reported the approval.
  The fine represents the largest ever imposed by the FTC against a tech company. Previously, the agency’s largest fine against a tech company came in 2012 when Google agreed to pay a $22.5 million penalty due to its privacy practices. The fine would represent approximately 9% of Facebook’s 2018 revenues.
  Facebook took a one-time charge of $3 billion in anticipation of the FTC fine in April during the company’s first-quarter results.
  The FTC approved the settlement by a 3-2 vote along party lines with Republicans in favor and Democrats against, and will now be reviewed Department of Justice, the report said.
  The FTC and Facebook declined to comment to CNBC.
  The FTC began probing Facebook in March 2018 following reports that political consulting firm Cambridge Analytica had accessed the data of 87 million Facebook users. The agency was concerned that Facebook had violated the terms of a 2011 agreement, which required Facebook to give users very clear notifications when their data was being shared with third parties.