Facebook said Tuesday it may be fined as much as $5 billion by the Federal Trade Commission, which has been investigating the social media giant's handling of user data for more than a year.
The commission, which reached a settlement in 2011 with the Menlo Park, Calif.-based company on its handling of user data, said in March 2018 that it had begun a nonpublic investigation after "press reports raising substantial concerns." It set aside $3 billion to cover the charge during the first three months of 2019 and noted it may have to pay as much as $2 billion more.
The inquiry by the agency, which enforces privacy regulations in the U.S., included information acquired by Donald Trump's campaign consultant, Cambridge Analytica, on 87 million Facebook users and their connections, according to a person familiar with the matter. The Menlo Park, Calif.-based company said last December it had fixed a bug that may have given outside apps unintended access to the photos of 6.8 million users, increasing momentum for a federal privacy bill governing data practices.
User data is vital to social media firms, which use it to connect lucrative advertising customers with a carefully tailored market of potential buyers. Many users, however, don't realize how their interactions on such platforms reveal preferences for travel destinations, restaurants, and even clothing designers.
Despite agreeing to often-complex terms of service before downloading the apps, they're surprised when data breaches occur as well as by how much information they've consented to sharing with developers of linked programs.
Facebook CEO Mark Zuckerberg, grappling with growing irritation about such issues, has said he supports a federal standard, as do a number of Silicon Valley trade groups, which hope it would preempt a growing thicket of state regulations, including one in California that mirrors new European rules.