In what had otherwise been a strong day for US tech stocks, the Washington Post sent shares of Facebook reeling on Friday afternoon when it reported that the FTC is preparing to follow through with a "record-breaking" fine against the social media giant for violating an agreement with the regulator to safeguard the data privacy of its users.
The fine, which would be the first penalty Facebook has faced since the Cambridge Analytica scandal broke nearly one year ago, won't be anywhere near the trillion-dollar penalty that some speculated Facebook could face at the hands of the FTC, but it will be more than the $22.5 million that the FTC hit Google with back in 2012.
The size of the fine was discussed during a recent meeting between the five FTC commissioners, though details aren't yet known. The agency is currently in shut down mode and it's unclear when more information will be known.
The FTC’s exact findings in its Facebook investigation and the total amount of the fine, which the agency’s five commissioners have discussed at a private meeting in recent weeks, have not been finalized, two of the people said. Facebook also has talked with FTC staffers about the investigation, one of the people familiar with the probe said, but it is unclear whether the company would settle with the FTC by accepting a significant financial penalty.
The FTC, which has been shut down amid the lapse in government funding, could not be reached for comment. FTC Chairman Joseph Simons did not respond to a request for comment. Facebook declined to comment.
To be sure, noting that the fine will be bigger than what Google faced in 2012 isn't saying much.
Not good for Facebook. But also, it sounds like the previous "record-setting" fine was just $22.5 million...so this would need to be WAYYYY bigger to have any serious impact on FB's business https://t.co/NyAb72P57d— Kurt Wagner (@KurtWagner8) January 18, 2019
But the move by US regulators to fine Facebook is notable in and of itself. Previously, US tech companies have faced far more scrutiny in Europe. By fining FB, the FTC would be taking the lead in holding a US tech giant accountable for misbehavior that spanned the globe.
Facebook shares slumped on the news:
Meanwhile, poor Zuck has yet to sell a single share since November 8...
Poor Zuck, still hasn't sold any shares since Nov 8.....basically the last time FB was trading at these levels— shinebox (@ljzaz) January 18, 2019