Federal Trade Commission Will Settle With Facebook For About $5 Billion
ARI SHAPIRO, HOST:
The Federal Trade Commission will settle with Facebook for about $5 billion according to The Wall Street Journal. This follows the FTC investigation that began more than a year ago after reports that Cambridge Analytica had gathered personal data from tens of millions of Facebook users. The data firm worked with President Trump's 2016 election campaign. The Wall Street Journal's Emily Glazer joins us now with more. Hi there.
EMILY GLAZER: Hi. How are you?
SHAPIRO: What specifically is this $5 billion fine for?
GLAZER: So the FTC began an investigation after these reports came out about Cambridge Analytica and these privacy missteps by Facebook. And the FTC investigation centered on whether there was a lapse that violated this 2012 consent decree that the FTC had with Facebook where Facebook agreed to better protect user privacy. So, of course, in this case, the answer in many ways was no. And the FTC has had this long-running probe going on for quite some time, and it also got very politicized and partisan. And finally we learned that they voted this week to approve a $5 billion settlement, a record for the agency.
SHAPIRO: And the vote was 3 to 2. Why the split?
GLAZER: It got really politicized and partisan, which I guess is resembling our country overall right now. Basically the Republican majority, the commissioners within the FTC were voting for the settlement, but the Democratic commissioners have objected, and they really have for months, which is why this was so drawn out. They wanted the agency to be, you know, even more tough. And it wasn't just about the amount; it's also about the terms.
Unfortunately we don't know too much about the terms right now, but a big sticking point for months was whether or not Mark Zuckerberg, the founder and head of Facebook, would be named and any kind of governance that could be action that could change, and we don't know where that stands right now.
SHAPIRO: You said $5 billion is a record fine, but Facebook is a record-setting company. Is that fine actually going to cause them much pain?
GLAZER: It really won't. You know, $5 billion is a huge amount of money, but it is not going to hurt Facebook as a company. In fact, you know, they just had earnings, and it really won't even - it'll definitely matter, but it doesn't hurt them too much financially. And this does matter a lot for the FTC because it's a record for - record penalty for violating an FTC order. The prior one was a $22.5 million...
GLAZER: ...Fine against Google in 2012. So this is just, like, leaps and bounds more.
SHAPIRO: And does this conclude the investigation, or is there more to it?
GLAZER: There is more to come. So we don't know exactly how much time it will take for it to totally be finalized. What we know right now is that the matter has been moved to the Justice Department's civil division, and from there, it'll have to be finalized. But again, it's really unclear how long that will take.
SHAPIRO: There are other investigations of Facebook happening in Congress, the Justice Department. Does this FTC fine have anything to do with what's happening in those other parts of the government?
GLAZER: I think that it's all related at the end of the day, and regulators are always looking to see what their peers are doing. But this doesn't cancel out other investigations or probes necessarily. And right now we're in a place where big tech is certainly in the spotlight. So I think there's a lot that's ramping up right now because big tech is largely unregulated, and there are so many calls, especially around privacy and antitrust and the public and politicians that are really calling for more oversight.
SHAPIRO: So a lot more to come on this story. Emily Glazer of The Wall Street Journal, thank you very much.
GLAZER: Thank you.
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