This “record-setting” corporate penalty is the equivalent of fining the average American household $483.04:
The Federal Trade Commission voted this week to approve a roughly $5 billion settlement with Facebook that could end an investigation into its privacy practices, according to a person familiar with the matter but not authorized to speak on the record, a deal that could result in unprecedented government oversight of the company.
The settlement — adopted with the FTC’s three Republicans supporting it and two Democrats against it — could end a wide-ranging probe into Facebook’s mishandling of users’ personal information that began more than a year ago.
The FTC’s $5 billion punishment against Facebook sets a new record as the largest penalty ever assessed against a tech company that broke a past promise to the government to improve its privacy practices. The matter from here rests in the hands of the Justice Department, which typically must finalize FTC settlements, though DOJ rarely has upended them.
Facebook warned investors earlier this year it could face an FTC fine as high as $5 billion. Wall Street appeared to reward the company for setting aside a large portion of that penalty earlier this year, as the company’s stock rose almost 2 points following news of the settlement Friday.
Fines don’t dissuade corporations in the slightest. Putting the CEOs, board members, and other executives in jail when the corporation breaks the law would be a much more effective disincentive.