The Federal Trade Commission has approved a $5 billion settlement with Facebook, stemming from its investigation into the company’s privacy practices related to the Cambridge Analytica scandal and whether Facebook violated its 2011 consent decree.
According to Bloomberg, the settlement was approved by a 3-2 vote and is the largest privacy fine in the FTC’s history. The two detractors were the FTC’s two Democratic commissioners, who presumably felt that the settlement was not punitive enough. The New York Times reports that “Facebook agreed to more comprehensive oversight of how it handles user data … But none of the conditions in the settlement will restrict Facebook’s ability to collect and share data with third parties.”
In other words, it’s business as usual. While the Cambridge Analytica scandal was bad for Facebook, it still largely operates on the same data-hoarding user model that opened the company up to developer exploitation and misuse in the first place. While it sounds like the agreement features more substantive oversight, it also sounds like Facebook doesn’t really have to change its ways, reform its business model, or is prevented from any actions it currently practices. Zuckerberg just has to pay the fine and not screw up again.
Until the decision today, the largest tech-industry fine was for $22 million, levied against Google in 2012. To put the $5 billion in perspective, Facebook made $6.8 billion in profits in the last quarter of 2018. Around the time the news broke this afternoon, Facebook share prices jumped from around $202 per share to $205.27, its highest price in the past year, and the sort of spike that often signals confidence from Wall Street. Maybe it’s a collective sigh of relief that the punishment wasn’t worse.