Federal Court approves $5 billion settlement between Facebook and FTC

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A federal court approved the $5 billion settlement between Facebook and the Federal Trade Commission (FTC), which will resolve the social media giant’s consumer privacy violations.

In July 2019, the FTC reached a settlement agreement with Facebook, which included the $5 billion civil money penalty and injunctive relief in the form of an amended administrative order.

The administrative order imposes a number of requirements that Facebook must follow to protect users’ privacy. The social media giant’s privacy violations arose from the Cambridge Analytica data scandal.

Judge finds the settlement “fair, reasonable, and in the public interest”

In his opinion on Thursday, U.S. District Court Judge Timothy Kelly noted the concerns raised by several advocacy groups regarding the adequacy of laws governing how tech companies must treat users’ personal information, which they collect and monetize.

Judge Kelly explained that those concerns are mainly for Congress to address and it’s not for the court.

He wrote, “But those concerns are largely for Congress; they are not relevant here. Mindful of its proper role, and especially considering the deference to which the Executive’s enforcement discretion is entitled, the Court will grant the consent motion and enter the order as proposed.”

Judge Kelly explained that the court’s role is to “determine that the settlement is fair, adequate, reasonable and appropriate under the particular facts and there has been valid consent by the concerned parties.”

“Applying this deferential standard—and despite the underhanded conduct of which the FTC accuses Facebook—the Court finds that the Stipulated Order passes muster. Specifically, the Court finds that the parties consented to the order and that it is fair, reasonable, and in the public interest,” wrote Judge Kelly.

FTC Chairman’s statement

FTC Chairman Joe Simons said they are pleased with the Court’s decision approving the “largest monetary penalty ever obtained by the United States on behalf of the FTC and the second largest in any context.”

He added that the Court’s decision highlighted the fact the settlement requires Facebook “to consider privacy at every stage of its operations and provide substantially more transparency and accountability for its executives’ privacy-related decisions.”

On the other hand, Facebook’s Chief Privacy Officer Michel Protti said, “This concludes the FTC’s investigation that began after the events surrounding Cambridge Analytica in 2018. As we described last year, Facebook agreed to fundamentally shift our approach to protecting people’s privacy, and to pay a $5 billion fine.”

“In my role as Chief Privacy Officer for Product, I’m committed to helping Facebook make important changes to the way that we approach privacy across the company as we implement the order. We’re off to a good start, with much of the work required by the agreement already underway.”