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The FTC approves about $ 5 billion Facebook Settlement



The Federal Trade Commission voted this week to approve an approximately $ 5 billion settlement with

Facebook
Inc.

Over a prolonged probe in the tech giant's privacy mistake, according to people familiar with the case.

The 3-2 vote of the FTC commissioners broke down party lines, with the Republican majority supporting the pact while democratic commissioners protested, the people said. The case has been moved to the Ministry of Justice's civil division, and it is unclear how long it takes to complete, the person said. The Ministry of Justice's reviews are part of the FTC's procedure, but generally do not change the outcome of an FTC decision.

A settlement is expected to include other public restrictions on how Facebook treats users' privacy. The additional terms of the settlement could not be immediately learned.

An FTC spokeswoman refused to comment, as a Facebook spokesman.

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Facebook said on April 24 that it was expecting to pay up to $ 5 billion to settle the probe. A resolution was struck by a split between Republicans and Democrats at the FTC, with Democrats pushing for tougher supervision of the social media giant.

The FTC survey began more than a year ago after dozens of millions of Facebook users' personal information falsely ceased in the hands of Cambridge Analytica, a data company working on President Trumps 201

6 campaign. The FTC survey focused on whether this was a violation of the 2012 confession secret with the agency where Facebook agreed to better protect the user's privacy.

Since the Cambridge Analytica case, other privacy deficiencies have proven, which contributes to Facebook's headache.

The settlement would easily exceed the previous record penalty for violating an FTC order, a $ 22.5 million fine against Google Inc. in 2012. The Commission has limited ability to impose fines for first-time privacy breaches but has a broad latitude on sanction reprimand offenders.

Facebook shares received slightly more than 1% on the news, despite the amount being $ 2 billion higher than the company had reserved for the settlement.

The party-line decision could reveal Republicans to criticism of the Democrats and reduce its impact on the FTC, which has sometimes been criticized for being toothless on privacy lately. After Facebook set aside billions of dollars to pay the buck, some Democrats criticized the amount as too small.

Facebook and other major technology are under an ever-stronger spotlight in Washington, D.C., including at a "Social Media Summit" hosted by the White House on Thursday, where President Trump repeatedly based Silicon Valley to be unfair to conservatives. Facebook was not invited to participate, nor any other technology companies, and they have previously said they are polishing their platforms regardless of political ideology.

Facebook also provides the opportunity for potential investigation of competition practices. The Wall Street Journal reported last month that the Justice Department is heading for an antitrust trial

Alphabet
Inc.

S Google and have the authority to watch

apple
Inc.

while the FTC has taken jurisdiction for possible antitrust probes by Facebook and

Amazon.com
.

Facebook is also preparing for the congressional hearings next week in connection with the proposed crypto competition Libra, which has drawn skepticism from President Trump and many regulators.

The privacy settlement coming as the FTC has faced political pressure to take a tougher line against Facebook and potentially other technology companies, at a time when European enforcers have been seen as the global top-tech technology hit.

With the dollar amount approved this week, the FTC achieved a financial penalty higher than what the EU could have sought for its privacy law.

Facebook's first FTC settlement, completed in 2012, solved the Commission's claims that the company repeatedly violated its privacy laws for its users, including by sharing its data with advertisers and other third parties.

For example, Facebook-based apps like a TV show quiz can find the user's relationship status or photos, as the FTC said, even though Facebook said it wouldn't share unnecessary personal details with apps. Facebook decided the case in part by promising to no longer deceive users.

In 2017, Facebook said that a personality prediction app had collected data from millions of users and shared it with a political consulting firm, Cambridge Analytica. The FTC reopened the case, this time armed with its considerable power to punish repeated offenders.

Big-ticket farmer is unlikely to satisfy Facebook's most famous critics, as much as multibillion-dollar penalties against big banks following the 2008 financial crisis did little to reduce anger on Wall Street.

Lawmakers in both parties are working on new privacy rules for large tech companies, while many democratic presidential candidates want to investigate Facebook's market power. Sen. Elizabeth Warren (D., Mass.) Calls to break up the company, a position recently supported by Facebook founder Chris Hughes.

Write to Emily Glazer at emily.glazer@wsj.com and Ryan Tracy at ryan.tracy@wsj.com

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