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Facebook is in active negotiations to resolve the Federal Trade Commission’s investigation into the company’s privacy failures, according to a new Washington Post report, talks that could result in a multi-billion dollar fine or a heavyweight court battle. The report didn’t include an exact figure and said that landing on an amount is the focus of the talks.
The negotiations have had a tumultuous beginning, but could lead to an agreement between the company and the government over a fine, business changes, and regular check ups, according to the Post. Any agreement would have to be approved by a judge. If negotiations go badly, that too would go to a federal judge and could lead to Facebook executives on the witness stand—an outcome the company will want to avoid.
The FTC investigation stems from the uproar after it was revealed last year that political consulting firm Cambridge Analytica accessed the personal data of 87 million Facebook’s users without explicit permission. The question at hand is if this and other lapses constitute a violation of deal known as a “consent decree” Facebook made with the FTC in 2011 to better protect the privacy of its users.
That deal was multifaceted and included an “affirmative express consent” agreement and a promise from Facebook that it would avoid “misrepresentations about the privacy or security of consumers’ personal information.” Investigators may believe that by allowing an organization like Cambridge Analytica to access users’ personal information without knowledge or express consent, Facebook violated the agreement.
“This episode has clearly hurt us,” Facebook CEO Zuckerberg told Congress last year, referring to the Cambridge Analytica scandal. “We have to do a lot of work about building trust back.”
What Zuckerberg does not have in mind, however, is paying a potentially record-breaking fine from the FTC. No exact number has been landed on yet, and the Washington Post reports that the company is fighting back against the agency’s initial demands.
Facebook and the FTC did not immediately respond to requests for comment.
The FTC could slap Facebook with fines of up to $40,000 per violation of the consent decree. If fined for every Facebook user, the number would would total trillions of dollars and is considered outside the realm of possibility. The Post does report that the fine will likely beat a $22.5 million penalty from the FTC against Google in 2012.
The reported negotiations happen as Facebook is engaged in a hiring spree in Washington. The social media giant is tapping Capitol Hill, civil society, and even the FTC itself for personnel. For instance, Facebook recently hired Melinda Claybaugh, who worked at the FTC for more than a decade before she became Privacy Policy Director in the company’s Washington, D.C. office.
Since Zuckerberg last testified in front of Congress, Facebook has faced a growing list of problems, including a Gizmodo investigation into how Facebook hands out user contact information to advertisers, a scheme to pay teenagers to monitor their phones, misinformation on WhatsApp, and the biggest data breach in its history. The list goes on.
Meanwhile, a privacy tool promised by the company after the Cambridge Analytica scandal is still nowhere in sight.
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