The Federal Trade Commission has agreed to settle with Facebook Inc FB over privacy allegations for about $5 billion, according to a Dow Jones report. The news agency cited an unnamed source in reporting that a majority of FTC commissioners have agreed on the settlement.
The settlement expected to include restrictions on how Facebook deals with the privacy of its users. Other terms of the settlement are possible, the report said.
Why It's Important
A $5 billion settlement wouldn’t be a major surprise – Facebook said earlier this year that it was expecting to have to pay about that amount to settle the FTC charges.
Both the FTC and Facebook declined to confirm the settlement to Dow Jones.
The commission began investigating the social media company more than a year ago over reports that personal data of Facebook users wasn’t adequately protected by the company when it allowed the data to be used by outside companies.
In particular, Facebook drew heavy scrutiny after press reports that a data firm called Cambridge Analytica used Facebook data without users’ permission to try to influence the 2016 presidential election. Facebook was already operating under a 2012 consent decree under which the company agreed to better protect users’ privacy.
A $5 billion settlement would be a record for the FTC, surpassing a $22.5 million against Google in 2012.
Facebook's stock closed Friday at $204.87 per share.
Related Links:
WSJ: Emails May Show Zuckerberg Knew Of Privacy Problems At Facebook
WaPo: Facebook Open To Working With Regulators To Increase Oversight Of Privacy Practices
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