The US Federal Trade Commission is expected to announce a roughly $5 billion (roughly Rs. 34,500 crores) settlement with Facebook as early as this week of its investigation into the social media company’s handling of user data, two sources briefed on the matter said on Monday.
The FTC, Justice Department and Facebook declined to comment. The FTC has been investigating allegations Facebook inappropriately shared information belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica. Reuters and other outlets reported July 12 that the FTC had voted to approve the settlement but was awaiting the concurrence of the Justice Department.
The settlement is expected to include government restrictions and oversight on how Facebook treats user privacy. It would mark the largest civil penalty ever paid to the FTC.
Some in Congress have criticised the reported $5 billion penalty, noting Facebook in 2018 had $55.8 billion in revenue and $22.1 billion in net income. Senator Marsha Blackburn said last week the fine should be “$50 billion.”
While the deal resolves a major regulatory headache for Facebook, the Silicon Valley firm still faces further potential antitrust probes as the FTC and Justice Department undertake a wide-ranging review of competition among the biggest US tech companies. Facebook is also facing public criticism from President Donald Trump and others about its planned cryptocurrency Libra over concerns about privacy and money laundering.
The Cambridge Analytica missteps, as well as anger over hate speech and misinformation on its platform, have prompted calls from people ranging from presidential candidate Senator Elizabeth Warren to a Facebook co-founder, Chris Hughes, for the government to force the social media giant to sell Instagram, which it bought in 2012, and WhatsApp, purchased in 2014.
But the company’s core business has proven resilient, as Facebook blew past earnings estimates in the past two quarters. Facebook is set to report earnings on Wednesday.
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