Facebook Settlement Rumors: Another 20 Years of Oversight

Settlement rumors around the FTC privacy investigation of Facebook for Cambridge Analytica continue and the latest term to leak from the media reports based on knowledgeable sources is that Facebook will be put under another 20 years of oversight. Facebook has been under FTC oversight since 2011 when it resolved a prior FTC investigation with a consent decree. A violation of the prior settlement is almost certainly the basis for the rumored fines.

Facebook is expected to face greater oversight under the anticipated oversight according to the rumors. The terms are anticipated to include the appointment of a high profile executive on privacy and a board committee to provide privacy compliance oversight.

There has been a string of leaks this year about the potential resolution of the settlement as well as a report by Facebook to its investors that they expected the fine to be at least $3 billion and likely in the $3 to $5 billion range. The FTC has not commented on the investigation since it issued notice last year that it was investigating the social media company.

It seems increasingly likely that there will be a deal announcement this summer in the investigation between the Federal Trade Commission and Facebook for Cambridge Analytica. There were apparently rumors that the settlement was imminent but the CNBC sources have indicated it was not expected to happen this week and one suggested it could be a month away.

The $3 to $5 billion range which has been suggested by Facebook has been criticized by Senator Richard Blumenthal (D-CT) and Senator Josh Hawley (R-MO). In a letter to the FTC last week, the Senators told the FTC Commissioners k that a $5 billion civil penalty was too little. They called the investigation a “defining moment” for the FTC and called on them to set a “resounding precedent” through “deterrent monetary penalties” and “forceful accountability measures”. The letter called the rumored settlement a “bargain” against Facebook’s $15 billion in revenue for the quarter and expressed concern that one-time penalties are “woefully inadequate to effectively restrain Facebook.”

The Congressional criticism of the rumored settlement emphasizes the high profile nature that privacy breaches have taken on in light of GDPR, the California Consumer Privacy Act (CCPA) and the debate over a federal privacy law. Businesses can not expect that privacy leaks will be a limited topic of conversation around the time of the consumer notification that largely remains under the radar otherwise.