The US's Federal Trade Commission (FTC) has reportedly voted to fine Facebook $5 billion for privacy violations and mishandling of user data revealed in the Cambridge Analytica scandal.
It's the biggest fine in FTC history, easily eclipsing the $22 million for Google in 2012, but for Facebook it represents just a month's revenue.
The 3-2 vote broke along party lines, with Republicans in support and Democrats in opposition to the settlement, according to reports. Neither Facebook nor the FTC has commented so far.
The case now moves to the Justice Department's civil division for review. It is unclear how long the process will take, though it is likely to be approved.
For many companies, a $5 billion fine would be crippling. But Facebook is not most companies. Last year its revenue was nearly $56 billion. This year, analysts expect around $69 billion, according to Zacks.
As a one-time expense, the company will also be able to exclude the amount from its adjusted earnings results the profit figure that investors and financial analysts pay attention to.
"This closes a dark chapter and puts it in the rearview mirror with Cambridge Analytica," said Wedbush analyst Daniel Ives. "Investors still had lingering worries that the fine might not be approved. Now, the Street can breathe a little easier."
Facebook prepared for a much bigger fine
Facebook was well prepared for the punishment. In April it said it was anticipating having to pay up to $5 billion.
So the news that it was no more than that came as something as a relief for the company and its shareholders. Shares in Facebook gained 24 cents after a few hours, closing at $204.87 on Friday. The stock is up more than 50 percent since the beginning of the year. In fact, Facebook's market value has increased by $64 billion since its April earnings report when it announced how much it was expecting to be fined.
"Has there really been a $5 billion fine?" tweeted French cybersecurity expert Matthieu Garin.
Several members of Congress are opposed to the settlement.
"The reported $5 billion penalty is barely a tap on the wrist, not even a slap," said Senator Richard Blumenthal, a Democrat from Connecticut. "Such a financial punishment for a purposeful, blatant illegality is chump change for a company that makes tens of billions of dollars every year."
He and others questioned whether the FTC will force Facebook to make any meaningful changes to how it handles user data. This might include limits on what information it collects on people and how it targets its hugely lucrative ads to them. Beyond the fine, it's currently unclear what measures the settlement includes.
Senator Elisabeth Warren tweeted Facebook had come out a winner.
Since the Cambridge Analytica debacle erupted more than a year ago and prompted the FTC investigation, Facebook has vowed to do a better job corralling its users' data. That scandal revealed that a data mining firm affiliated with President Donald Trump's 2016 campaign improperly accessed private information from as many as 87 million Facebook users through a quiz app. The issue was whether Facebook violated a 2011 settlement with the FTC over user privacy.
Other leaky controls have also since come to light. Facebook acknowledged giving big tech companies like Amazon and Yahoo extensive access to users' personal data, in effect exempting them from its usual privacy rules. And it collected call and text logs from phones running Google's Android system in 2015.
The company faces a number of other investigations, both in the US and overseas, that could carry their own fines and, more importantly possible limits to its data collection. This includes nearly a dozen by the Irish Data Protection Commissioner, which oversees privacy regulation in the European Union.