Facebook to Pay $5 Billion Penalty for Privacy Violations

July 24, 2019, 2:35 PM UTC

Facebook will pay a record-setting $5 billion for its mishandling of user data and privacy violations.

The Federal Trade Commission announced the penalty Wednesday morning, noting that the fine and the social network’s agreement to modify its corporate structure will resolve the longtime investigation into its privacy practices.

The $5 billion fine, says the FTC, is the largest ever imposed on a company for violating consumer’s privacy—nearly 20 times as large as the previous record.

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” said FTC Chairman Joe Simons in a statement. “The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC. The relief is designed not only to punish future violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.”

Facebook CEO and founder Mark Zuckerberg outlined the changes to Facebook’s corporate structure in a post on the site, saying “We’ve agreed to pay a historic fine, but even more important, we’re going to make some major structural changes to how we build products and run this company.”

The company will set up an independent privacy committee on its board that will oversee all privacy matters. Previously, Zuckerberg had the final say on matters of user privacy.

“We’ll have to review our technical systems to document any privacy risks and how we’re handling them,” said Zuckerberg. “Going forward, when we ship a new feature that uses data, or modify an existing feature to use data in new ways, we’ll have to document any risks and the steps we’re taking to mitigate them. We expect it will take hundreds of engineers and more than a thousand people across our company to do this important work. And we expect it will take longer to build new products following this process going forward.”

The privacy board’s work will extend to Instagram and WhatsApp as well.

The settlement comes after repeated privacy issues at Facebook, the most notable being the exposure of 87 million users’ data to the political analysis firm Cambridge Analytica.

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