Facebook just got clobbered with a record $5 billion penalty over the Cambridge Analytica data breach
- The Federal Trade Commission just slammed Facebook with a record $5 billion penalty over its handling of user data following the giant Cambridge Analytica breach last year.
- Facebook said last month that it had set aside $3 billion to $5 billion for the settlement.
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The Federal Trade Commission announced today that it has slapped Facebook with a $5 billion penalty over its handling of user data which came to light after the Cambridge Analytica scandal.
The settlement is the result of Facebook violating a 2012 agreement with the FTC, in which it promised not to hand over user data to third parties without consent.
It represents the biggest penalty the FTC has handed down to a technology company, with the regulator calling it "unprecedented."
"The $5 billion penalty against Facebook is the largest ever imposed on any company for violating consumers' privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide," the FTC said in a press statement.
The penalty also includes a restructuring of Facebook's board of directors, mandating that it have an independent privacy committee. The FTC claims this committee will remove CEO Mark Zuckerberg's "unfettered control" over users' privacy, and will be responsible for appointing "compliance officers" to Facebook's privacy programme. Members of the new committee must be appointed by an "independent nominating committee," and can only be fired by a "supermajority" from Facebook's board of directors.
Facebook said it was expecting the fine in its first-quarter earnings report last month, saying that it had set aside $3 billion to $5 billion in anticipation. The company is due to give its second-quarter earnings report later on Wednesday.
Although the FTC fine has been long-anticipated, it has landed amid a flurry of regulatory activity. A source told the Wall Street Journal that the Securities and Exchange Commission is due to announce a settlement with Facebook to the tune of more than $100 million on Wednesday, and on Tuesday the Department of Justice announced a sweeping antitrust probe into the big tech giants.
This story is developing...