FTC Slaps Facebook With $5B Fine Over Cambridge Analytica Scandal

Facebook AH NS 11

The FTC has just settled with Facebook, slapping the social media company with a $5 billion fine. That’s roughly equal to about nine-percent of Facebook’s revenue from the past year. This is also the biggest fine that the FTC has ever handed out to a tech company, with the previous highest being to Google in 2012 for about $22.5 million.

There’s much more to this fine than just the dollar amount too. The FTC is looking to make Facebook more independent from its founder, Mark Zuckerberg’s decision making. Which, as we have seen in the past few years, is going to be a good thing. Zuckerberg has a tight hold on Facebook right now, and he is responsible for the majority of the issues that it has right now.

This order from the FTC mandates that Facebook creates an independent privacy committee on its board of directors to remove “unfettered control” from Zuckerberg. The members of this new committee will be nominated by an independent nominating committee and can only be fired by a two-thirds of voting shares. This would prevent Zuckerberg from being able to fire these members by himself.


Zuckerberg is also going to be taking on new responsibilities, which will ensure compliance with this order. He will need to send in quarterly certifications to the FTC, and if Zuckerberg does not keep the privacy where the FTC wants it to be, he could be facing criminal charges.

This is not a total change for Facebook and won’t automatically fix the privacy issues that it has, but it is a step in the right direction. Facebook has also been taking steps to improve privacy for its users, since the FTC opened up this investigation into Facebook last year – following the Cambridge Analytica scandal.

The FTC started this probe into Facebook last year, after the Cambridge Analytica scandal came to light. For those that might not remember, Cambridge Analytica had harvested data from over 87 million Facebook users. It used a variety of apps and quizzes on Facebook to gain the user’s friends data. This data was used by the Trump Campaign  to target ads, and help get more voters. This wasn’t illegal for Trump to use the data, but it was a big issue for Facebook, as Cambridge Analytica was able to get so much data, without even really needing to ask users for permission to use that data.


Facebook isn’t the only company being investigated right now by regulators. All of the big tech companies are being investigated, including Google, Amazon, and Apple, in addition to Facebook. As these companies are starting to care-less about privacy, and also working to squeeze out their smaller competitors. That’s not something that regulators like, so it’s not surprising to see regulators looking into this.

With this order, the FTC has essentially neutered Zuckberg and his control over Facebook. Which is a really big deal, as he did have controlling votes within Facebook prior to this order. And he has to send in privacy certifications each quarter. So it’s a lot of changes coming to Facebook.