The Cambridge Analytica data misuse scandal has ended up costing Facebook $5 billion. The Federal Trade Commission formally announced a $5 billion settlement with Facebook today, ending the years-long investigation into the scandal and other privacy issues. This is the second largest fine ever imposed by the FTC.
According to the agreement filed by the FTC, Facebook violated the law as it failed to protect user data from third parties, served ads by using phone numbers which had been provided for securing accounts, and lying to users about its facial recognition software being disabled by default.
“This approach dramatically increases the likelihood that Facebook will be compliant with the Order; if there are any deviations, they likely will be detected and remedied quickly,” wrote the three supporting FCC commissioners in a statement.
Facebook will have to pay $5 billion in fines and also accept some new restrictions on its business. They include a mandated privacy review of every new product or service developed and also to obtain purpose and use certifications from third-party developers and apps that want to use Facebook’s user data.
Facebook added in a blog post that this settlement will mark a “sharper turn” towards privacy for the company which will be on a different scale than anything it has done in the past. Facebook has also agreed to pay $100 million to the Securities and Exchange Commission as it failed to disclose the breach to investors.