The Federal Trade Commission has endorsed a roughly $5 billion settlement with Facebook Inc. over a long-running probe into the tech giant’s privacy missteps, according to people familiar with the matter.
FTC commissioners this past week voted 3-2 in favor of the agreement, with the Republican majority backing the pact while Democratic commissioners objected, the people said. The matter has been moved to the Justice Department’s civil division and it is unclear how long it will take to finalize, one of the people said.
Justice Department reviews are part of FTC procedure but typically don’t change the outcome of a decision by the commission.
A settlement is expected to tighten government restrictions on how Facebook treats user privacy. The additional terms of the settlement couldn’t immediately be learned.
An FTC spokeswoman declined to comment, as did a Facebook spokesman.
Facebook said in April that to settle the probe it was expecting to pay up to $5 billion. A resolution was bogged down by the party-line split on the FTC, with the Democrats pushing for tougher oversight of the social-media giant.
One point of disagreement was the extent to which Facebook Chief Executive Officer Mark Zuckerberg should be held responsible or be made accountable for future missteps.
The FTC investigation began more than a year ago after reports that personal data of tens of millions of Facebook users improperly wound up in the hands of Cambridge Analytica, a data firm that worked on President Trump’s 2016 campaign.
The FTC investigation centered on whether that lapse violated a 2012 consent decree with the agency under which Facebook agreed to better protect user privacy.
Cambridge Analytica shut downin 2018 after the allegations surrounding Facebook data and other questions about its political tactics.
The company had won political consulting work in the U.S. by promising to use data to profile and influence voters with political messages. It contracted for several Republican presidential candidates ahead of the 2016 election, including Mr. Trump’s campaign.
The user data at issue in the Facebook case reached beyond those who downloaded the app to include about 30 different data points about those people’s Facebook friends
Since the Cambridge Analytica affair, other privacy missteps have come to light, adding to Facebook’s headaches.
The settlement would easily exceed the previous record penalty for violating an FTC order, a $22.5 million fine levied against Google Inc. in 2012.
The commission has limited powers to impose fines for first-time privacy violations but has broad latitude to sanction repeat offenders.
Facebook shares gained 1.8% on Friday, even though the reported settlement amount was $2 billion more than the company has reserved for the settlement. Facebook’s profit for the first quarter before accounting for the penalty was slightly more than $5 billion.
After Facebook set aside the funds, some Democrats criticized the amount as too little, and the party-ling decision this past week could expose Republicans to further criticism.
The FTC has sometimes been attacked as being toothless on privacy.
Facebook and other large tech companies are under an increasingly harsh spotlight in Washington, D.C., including at a “social media summit” at the White House on Thursday in which President Trump repeatedly bashed Silicon Valley as being unfair to conservatives. Facebook wasn’t invited to attend, nor were other tech companies.
They have previously said they police their platforms without regard to political ideology.
Facebook also faces possible scrutiny of its competitive practices.
The Wall Street Journal reported last month that the Justice Department is gearing up for an antitrust probe of Alphabet Inc. Google and has authority to look into Apple Inc., while the FTC has taken jurisdiction for possible antitrust probes of Facebook and Amazon.com Inc.
Facebook is also preparing for congressional hearings in the coming week related to its proposed crytocurrency Libra, which has drawn skepticism fro President Trump and many regulators.