FTC Settlement with Facebook Over Privacy Policies Imposes Unprecedented Penalties and Restrictions

Proposed Settlement Requires Facebook to Pay a Record-Breaking $5 Billion Penalty, Modify Its Corporate Governance Structure, and Submit to Third-Party Oversight of Its Privacy Program Sullivan & Cromwell LLP - July 26, 2019

On July 24, 2019, the Federal Trade Commission (“FTC”) announced the settlement of its investigation into the privacy practices of Facebook Inc. (“Facebook”) arising from the Cambridge Analytica scandal, in which Cambridge Analytica, a British political consulting firm, as well as other application developers, were permitted to harvest personal information from Facebook users without their consent. The FTC alleged that Facebook deceived users about its data sharing and privacy policies, and that its conduct violated an existing consent order from 2012 that prohibited Facebook from misrepresenting the extent to which users could keep their personal information private. As part of the settlement, Facebook has agreed to pay a record-breaking $5 billion penalty, restructure its privacy program, and submit to independent monitoring of that program by a third party.