The Federal Trade Commission (FTC) said the penalty was the largest ever imposed on any company for violating consumers’ privacy and one of the largest penalties ever assessed by the US government for any violation.
The $5 billion fine against Facebook represents approximately 9% of the company’s 2018 revenue.
The FTC said that Facebook’s data policy was deceptive to “tens of millions” of people who used Facebook’s facial recognition tool and also violated its rules against deceptive practices when it did not disclose phone numbers collected to enable a security feature would be used for advertising.
The FTC started probing Facebook in March 2018 after reports that political consulting firm Cambridge Analytica had accessed the data of 87 million Facebook users without authorization. The agency was concerned that Facebook had violated the terms of a previous agreement, which required it to give users clear notifications when their data was being shared with third parties.
Under the settlement, Facebook’s board will create an independent privacy committee that removes “unfettered control by Facebook”CEO Mark Zuckerberg said over decisions affecting user privacy.
Facebook also agreed to exercise greater oversight over third-party apps.