The Federal Trade Commission voted to approve a fine of roughly $5 billion against Facebook over user-privacy violations by the social media company that involved tens of millions of people, according to several media reports. The fine, which still needs approval from the Department of Justice, would be the largest the FTC has levied on a tech company.
But prominent Democrats are criticizing the proposed levy, calling it a drop in the bucket for a company as profitable as Facebook.
Rep. David Cicilline of Rhode Island called the fine "a Christmas present five months early." Sen. Mark Warner, of Virginia, called on Congress to act, saying the FTC was "either unable or unwilling to put in place reasonable guardrails to ensure that user privacy and data are protected."
Facebook made a profit of $22 billion last year on $56 billion in total revenue, or a profit margin of 45%. Facebookand said in April it was anticipating having to pay up to $5 billion.
"People want to have this cathartic hand slap that really teaches Silicon Valley a lesson of some sort," Ian Sherr, editor-at-large for CNET, told CBSN.
Given how much money Facebook has on hand, "in a lot of ways this is just couch change," Sherr added.
The FTC started looking into Facebook last March, after news reports that Facebook had allowed Cambridge Analytica, a social media data firm that worked on President Trump's 2016 campaign, to collect data from millions of users without their knowledge.
Seven years prior, Facebook had reached a settlement with the FTC after it was accused of making data public that it had promised would be private. As part of that settlement, Facebook agreed to ask for users' permission before sharing their data more broadly than their privacy settings specified.
Facebook declined to comment on the reports of the FTC fine; the FTC did not immediately respond to messages for comment from the Associated Press.
The 3-2 vote by FTC commissioners broke along party lines, according to reports, with Republicans in support and Democrats in opposition to the fine.
Wall Street appeared unfazed at the prospect of the fine. Facebook's shares closed at $204.87 on Friday and added 24 cents after hours. The stock is up more than 50% since the beginning of the year.
"This closes a dark chapter and puts it in the rearview mirror with Cambridge Analytica," said Wedbush analyst Daniel Ives. "Investors still had lingering worries that the fine might not be approved. Now, the Street can breathe a little easier."
The settlement is expected to include limits on how Facebook treats user privacy. Some have called on the FTC to hold Facebook CEO Mark Zuckerberg personally liable for the privacy violations in some way, but based on the party line vote breakdown experts said this is not likely.
Marc Rotenberg, president of the nonprofit online privacy advocacy group Electronic Privacy Information Center, said he was "confused" as to why the Democratic commissioners didn't support the settlement and said he suspects, without having seen the actual settlement, that this was due to the Zuckerberg liability question.
"But I thought that was misguided," he said, adding that EPIC instead supports more wholesale limits on how Facebook handles user privacy.
Since the Cambridge Analytica debacle erupted more than a year ago and prompted the FTC investigation, Facebook has vowed to do a better job corralling its users' data. That scandal revealed that the data mining firm affiliated with President Donald Trump's 2016 campaign improperly accessed private information from as many as 87 million Facebook users through a quiz app.
Other leaky controls have also since come to light. Facebook acknowledged giving big tech companies like Amazon and Yahoo extensive access to users' personal data, in effect exempting them from its usual privacy rules. And it collected call and text logs from phones running Google's Android system in 2015.