Facebook to pay $5 Billion to settle U.S. investigation over privacy violations according to the WSJ

Facebook will pay $5 Billion to settle an investigation by the Federal Trade Commission (FTC) concerning privacy violations, according to the Wall Street Journal. The FTC investigation was engaged after reports that personal data of tens of millions of Facebook users were improperly obtained by Cambridge Analytica, a data firm that worked on President Trump’s 2016 campaign. The FTC examined whether that violated a 2012 consent decree with the agency under which Facebook agreed to better protect user privacy. Cambridge Analytica shut down in 2018 after the allegations surrounding Facebook data and other questions about its political tactics. The company had won political consulting work in the U.S. by promising to use data to profile and influence voters with political messages. It contracted for several Republican presidential candidates ahead of the 2016 election, including Mr. Trump’s campaign.

The settlement exceeds the previous record penalty for violating an FTC order, a $22.5 million fine levied against Google Inc. in 2012. The commission has limited powers to impose fines for first-time privacy violations but has broad latitude to sanction repeat offenders.

Facebook also faces possible scrutiny of its competitive practices. The Wall Street Journal reported that the Justice Department is gearing up for an antitrust probe of Alphabet Inc.’s Google and has authority to look intoŒ Apple Inc. while the FTC has taken jurisdiction for possible antitrust probes of Facebook and Amazon.com Inc.