Social media giant Facebook has agreed to a $5 billion fine – the largest in Federal Trade Commission history – for violating users’ privacy.
The record-breaking fine comes after the FTC began investigating the company last spring after political consulting firm Cambridge Analytica gained access to almost 87 million Facebook users’ data without their permission. FTC leaders said the data access was a violation of a previous agreement Facebook signed in 2012 that required transparency and notifications when user data was shared with third parties.
The $5 billion fine is part of a 20-year agreement between the FTC and Facebook that aims to improve the platform’s privacy practices, including establishing a board of directors-led independent privacy committee.
With the settlement announcement, Facebook CEO Mark Zuckerberg posted a message committing to higher privacy standards for users.
“We’ve agreed to pay a historic fine, but even more important, we’re going to make some major structural changes to how we build products and run this company,” Zuckerberg said. “We have a responsibility to protect people’s privacy. We already work hard to live up to this responsibility, but now we’re going to set a completely new standard for our industry.”
Zuckerberg said changes will include evaluating the company’s technical systems for risks and mitigating those risks as well as documenting any potential security issues as new features are launched or existing features are updated.
“We expect it will take hundreds of engineers and more than a thousand people across our company to do this important work,” he said. “And we expect it will take longer to build new products following this process going forward.
“Overall, these changes go beyond anything required under U.S. law today. The reason I support them is that I believe they will reduce the number of mistakes we make and help us deliver stronger privacy protections for everyone.”
The $5 billion fine equates to about 9% of Facebook’s annual revenue. The fine far exceeds the FTC’s previous largest fine of $22.5 million against Google for privacy practice violations in 2012.
The FTC agreement is the second fine this week for Facebook. The company also agreed to a $100 million settlement with the Securities and Exchange Commission for disclosures company officials made about compromised user data that was deemed misleading.