Multiple media outlets are reporting today that the Federal Trade Commission has agreed to settle its case against Facebook on its privacy practices for $5 Billion.
The Wall Street Journal reports that the vote by FTC commissioners was 3-2 in favor of accepting the agreement and split along party lines with the Republican majority favoring the settlement. According to The Wall Street Journal, the matter next goes the the Justice Department’s civil division for final review.
According to the Mercury News, assuming reports are correct, this will be the largest fine imposed to date by the U.S. government on a tech company. The Washington Post reports that the fine is more than 200 times higher than any previous fine.
Interestingly enough, The Wall Street Journal is reporting that the fine obtained by the FTC exceeds what the European Union could have obtained under its privacy laws.
The Washington Post predicts that the settlement will impose serious consequences on Facebook that go far beyond just a $5 billion fine. However, The Washington Post acknowledges that the dissenting commissioners opposed the settlement because they wanted some assessment of personal liability against CEO Mark Zuckenberg; commissioners reportedly decided to accept a settlement without any such assessment in order to ensure that the matter did not end up in litigation.
While controversial, the FTC’s enforcement action in this matter still sets a significant precedent for the software industry with respect to the consequences of not protecting data uploaded to or generated by software. Software companies are on notice: the FTC is closely following your privacy practices and may assess fines in the billions of dollars against you if you fail to take sufficient steps to protect user data.