Skip to main content

U.S. Business Regulators approve US$5-billion fine for Facebook over privacy issues

The U.S. Federal Trade Commission voted this week to fine Facebook about US$5-billion for mishandling users’ personal information, according to two people briefed on the vote, in what would be a landmark settlement that signals a newly aggressive stance by regulators toward the country’s most powerful technology companies.

The agency approved the settlement in a 3-2 vote along party lines, with the two Democrats voting against it, said the people, who would speak only the condition of anonymity.

The deal still needs final approval from the Justice Department, which rarely rejects settlements reached by the agency. If approved, it would be the biggest fine by far levied by the federal government against a technology company, easily eclipsing the US$22-million imposed on Google in 2012. The size of the penalty underscored the rising frustration among Washington officials with how Silicon Valley giants collect, store and use people’s information.

Story continues below advertisement

In addition to the fine, Facebook agreed to more comprehensive oversight of how it handles user data, according to the people. But none of the conditions in the settlement will restrict Facebook’s ability to collect and share data with third parties. That decision appeared to split the five-member commission: The two Democrats who voted against the deal sought stricter limits on the company, the people said.

The settlement with Facebook would be one of the most aggressive regulatory actions by the Trump administration, and a sign of its willingness to punish one of the country’s biggest and most powerful companies. President Donald Trump has dialled back regulations in many industries, but the Facebook settlement sets a new bar for privacy enforcement by U.S. officials, who have brought few cases against large Silicon Valley companies.

Until now, the biggest fines and restrictions against the companies have come from Europe. Officials there have imposed several charges of antitrust and privacy laws against Amazon, Apple, Facebook and Google. Last year, the European Union fined Google the equivalent of US$5.1-billion for abusing its large market share in the mobile phone industry.

But in recent weeks, U.S. regulators and lawmakers of both parties have taken a more combative stance toward the tech giants. Congress started an antitrust investigation into how the biggest tech companies have harmed consumers and impeded competition. The Justice Department and the FTC divvied up responsibility for potential antitrust investigations into several of the companies.

On Thursday, Mr. Trump took shots at Facebook and other social media companies, accusing them of being biased against conservatives. He also took to Twitter to criticize Facebook’s latest initiative into cryptocurrency – a project called Libra, which is still in its early stages – saying that Facebook’s proposed coin would never usurp the dollar. David Marcus, the Facebook executive in charge of Libra, is scheduled to appear before Congress next week to explain and defend the initiative.

Peter Kaplan, a spokesman for the FTC, declined to comment.

Andy Stone, a spokesman for Facebook, also declined to comment.

Story continues below advertisement

Shares of Facebook surged to US$205.27 – the stock’s highest price in the past year – in after-hours trading Friday after news of the vote became public.

The Wall Street Journal earlier reported on the vote by the commission.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter