Alex Kantrowitz and Ryan Mac, Buzzfeed News:
Facebook is setting aside $3 billion to cover the expected costs, including an anticipated fine, related to an ongoing investigation with the Federal Trade Commission over its privacy practices, the company said today. The expenses could go as high as $5 billion, Facebook said.
After announcing the anticipated settlement, Facebook’s market capitalization climbed by approximately $40 billion in just over an hour of after-hours trading.
Elizabeth Dwoskin and Tony Romm, Washington Post:
The FTC’s probe has sought to determine if Facebook’s entanglement with Cambridge Analytica violated a 2011 agreement, known as a consent decree, with the U.S. government to improve its privacy practices. Since then, the social network has acknowledged additional data mishaps, prompting federal officials to expand their inquiry, according to two people familiar with the matter who spoke on the condition of anonymity because the probe is confidential under law. The probe could also target CEO Mark Zuckerberg personally, perhaps subjecting him to new oversight of his leadership, The Post first reported.
The low value of the fine relative to Facebook’s annual income is disappointing, but not quite as disappointing as recognizing that it’s a fine for breaking a 2011 agreement between the company and the FTC — not for breaking any particular law. That agreement established no financial penalties at the time, but would subject Facebook to fines for failing to agree to it.
That is to say that Facebook may not have faced penalties for its flagrant and wilful violation of basic privacy expectations over the past eight years had they not been previously caught doing so.