A $5 Billion Facebook Fine is Coming from the FTC over Cambridge Analytica

The Federal Trade Commission has approved a $5 billion settlement with Facebook over the Cambridge Analytica scandal by a vote of 3-2, according to media reports. The fine will be the largest ever imposed by the FTC against a tech company, as well as the largest for a privacy violation.

The 3-2 vote occurred along party lines with the two FTC commissioners affiliated with the Democratic party voting to reject it. The settlement will be reviewed by the Department of Justice before it is publicly announced.

Earlier this year, Facebook took a charge of $3 billion against its first quarter results in anticipation of the FTC fine. Facebook disclosed to investors at that time that it expected the FTC fine to be between $3 and $5 million.

The Facebook fine comes amid reports that the odds of Congress passing a new federal privacy law are dwindling in the near term. There are a number of reported sticking points, including the preemption of the CCPA, inclusion of data breach measures, a right to sue for individuals over privacy violations, and how much to boost the regulatory powers of the nation’s leading privacy enforcement agency, the FTC. With no agreement yet on the budget and debt ceiling, as well as the election next year, it looks like the California Consumer Privacy Act will indeed go into effect without federal preemption and the earliest the federal government would replace the privacy enforcement scheme based on the unfair and deceptive trade practices language in Section 5 of the FTC Act.

The news reports about the Facebook fine followed the disclosure earlier last week of two proposed GDPR fines by the United Kingdom Information Commissioner’s Office (ICO) topping more than $100 million each. The ICO issued a notice of intent to fine British Airways 183.39 million pounds (approximately $230 million USD) and Marriott 99 million pounds ($124 million USD) under GDPR for data breaches.