Federal regulators have fined Facebook $5 billion for privacy violations and are instituting new oversight and restrictions on its business. The fine is the largest the Federal Trade Commission has levied on a tech company, though it won’t make much of a dent for a company that had nearly $56 billion in revenue last year.
As part of the agency’s settlement with Facebook, Mark Zuckerberg will have to personally certify his company’s compliance with its privacy programs. The FTC said that false certifications could expose him to civil or criminal penalties.
“The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC,” Joe Simons, the chairman of the FTC, said in a statement. He added that the new restrictions are designed “to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.”
Despite all the damning discoveries by the panel, Facebook isn’t admitting any wrongdoing.
Two of the five commissioners opposed the settlement and said they would have preferred litigation to seek tougher penalties.
Facebook’s top lawyer, Colin Stretch, said the company’s FTC settlement will lead to more rigorous management of user privacy — including more technical controls to better automate privacy safeguards.
Facebook will also pay a separate $100 million fine to the Securities and Exchange Commission to settle charges it made misleading disclosures about the risk of misuse of Facebook user data.
The FTC opened an investigation into Facebook last year after revelations that data mining firm Cambridge Analytica had gathered details on as many as 87 million Facebook users without their permission.
The agency said that following its yearlong investigation of the company, the Department of Justice will file a complaint alleging that Facebook “repeatedly used deceptive disclosures and settings to undermine users’ privacy preferences.”
The agency is also suing Cambridge Analytica over the privacy violations and has settled with its former CEO Alexander Nix and an outside researcher, Aleksandr Kogan, who developed the Facebook app that harvested tens of millions of people’s personal information.
Cambridge Analytica filed for bankruptcy and hasn’t settled the allegations, but Kogan and Nix have agreed to restrictions on how they conduct business in the future. The settlement requires them to delete or destroy all personal information gathered.