Facebook’s Fine for Data Mishap is FTC’s Biggest Ever in Tech

This is FTC’s biggest ever fine on a technology company but even that won’t pinch Facebook’s deep pockets by much.

Federal regulators have fined Facebook $5 billion for privacy violations and are instituting new oversight and restrictions on its business. But they are only holding CEO Mark Zuckerberg personally responsible in a limited fashion.

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, 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.

Some experts had thought the FTC might fine Zuckerberg directly or seriously limit his authority over the company.

The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC

Statement from Joe Simons, Chairman, FTC

He added that the new restrictions are designed "to change Facebook's entire privacy culture to decrease the likelihood of continued violations." Two of the five commissioners opposed the settlement and said they would have preferred litigation to seek tougher penalties.

The commission 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 Wednesday that following its year long 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 FTC said Facebook's deceptive disclosures about privacy settings allowed it to share users' personal information with third-party apps that their friends downloaded but the users themselves did not give permissions to.

In March, Zuckerberg unveiled a new, "privacy-focused" vision for the social network that emphasizes private messaging and groups based on users' interests.

But critics and privacy advocates are not convinced that either a fine or Facebook's new model amounts to a substantial change.

The fine on Facebook is well above the agency's previous record for privacy violations — $22.5 million — which it dealt to Google in 2012 for bypassing the privacy controls in Apple's Safari browser.