Facebook initially argued a proposed FTC fine was 'excessive' and 'unconstitutional'

The social network fought against a fine related to the Cambridge Analytica data scandal.

Queenie Wong Former Senior Writer
Queenie Wong was a senior writer for CNET News, focusing on social media companies including Facebook's parent company Meta, Twitter and TikTok. Before joining CNET, she worked for The Mercury News in San Jose and the Statesman Journal in Salem, Oregon. A native of Southern California, she took her first journalism class in middle school.
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Queenie Wong
3 min read

The FTC fined Facebook a record-setting $5 billion this year for alleged privacy mishaps. 

Angela Lang/CNET

When the Federal Trade Commission announced in July it was fining Facebook a record-setting $5 billion for alleged privacy mishaps, some lawmakers and advocacy groups argued the penalty was a bargain for the world's largest social network. 

Behind the scenes, Facebook's lawyers pushed back against a fine initially proposed by the FTC, according to a document the company sent to the FTC earlier this year. 

Months before the FTC finalized a settlement with the social media giant, Facebook's lawyers argued to the agency that the fine was "unconstitutional, unlawful, and unsupported," a Feb. 28 white paper submitted on behalf of the company shows. Facebook didn't act in "bad faith," or profit from its alleged privacy mishaps and was prepared to prove that consumers weren't harmed, the paper stated. 

"No court would entertain such a penalty, and neither will Facebook," the company's lawyers wrote in the white paper. 

It's unclear from the white paper if Facebook, which was represented by the law firm Gibson Dunn, was arguing against a fine that was $5 billion or much larger. The amount of the fine is redacted from the white paper, but the company's lawyers mention it's more than the $22.5 million the FTC fined Google as part of a 2012 settlement over tracking users.

"The fine that Staff proposes is excessive, arbitrary, and capricious," the white paper submitted on behalf of Facebook stated.

CNET contacted the FTC about the proposed fine's amount and the agency declined to comment. A Facebook spokesperson said in a statement that the fine it got from the FTC was "unprecedented," suggesting that the company would oppose a larger amount.

"It's the largest fine in the history of the Federal Trade Commission and exceeds what the FTC would have been able to obtain in court, as experts have said," a Facebook spokesperson said. "For people who use Facebook, the most important parts of this agreement are the significant accountability and oversight measures we're putting in place."

The paper was included in 547 pages of public documents that were available on the FTC's website Monday, highlighting the tension that erupted between Facebook and the agency as they tried to iron out the details of what ended up being a record settlement. News outlets, including The Washington Post and The Hill, made a Freedom of Information Act request for documents related to the Facebook settlement.

The settlement between Facebook and the FTC stems from a data privacy scandal involving Cambridge Analytica. The now-defunct UK consultancy that worked on President Donald Trump's campaign harvested the data of up to 87 million Facebook users without their consent. The FTC was investigating whether Facebook violated an earlier agreement to protect user privacy.

Lawyers for Facebook compared what the FTC was proposing to fines the agency imposed on other companies, including LifeLock, the National Urological Group and Google. Facebook's lawyers also said that the proposed fine violated the due process clause and the Eighth Amendment, which bars the federal government from imposing excessive fines. The company argued that the proposed fine was "unlawful," alleging it ran afoul of the FTC's authority. 

Originally published Sept. 30, 3:11 p.m. PT
Update, 4:03 p.m. PT: Adds statement from Facebook.