The Securities Exchange Commission announced Wednesday that it'll fine
$100 million as part of a settlement in relation to a probe into the social network's handling of users' data. The investor protection agency alleged that Facebook's public disclosures didn't offer sufficient warning that developers and other third parties, who in obtaining user data, may have violated the social network's policies or failed to gain user permission.
It said that Facebook "presented the risk of misuse of user data as merely hypothetical," when it knew that the data had actually been misused.
The SEC, along with the Federal Trade Commission and other federal agencies, began probing Facebook in July 2018 following Facebook's disclosures in March 2018 that Cambridge Analytica, a digital consultancy that had ties to the Trump presidential campaign, improperly accessed personal information of up to 87 million of the social network's users.
"Public companies must accurately describe the material risks to their business," said Stephanie Avakian, co-director of the SEC's enforcement division. "As alleged in our complaint, Facebook presented the risk of misuse of user data as hypothetical when they knew user data had in fact been misused. Public companies must have procedures in place to make accurate disclosures about material business risks."
Facebook's general counsel, Colin Stretch, wrote that the social network shares the SEC's interest in transparency, and noted that it's updated its disclosures and controls accordingly.
The FTC also unveiled its $5 billion settlement with Facebook on Wednesday over the Cambridge Analytica scandal.
Facebook said the agreement "will mark a sharper turn toward privacy, on a different scale than anything we've done in the past," while CEO Mark Zuckerberg said in a separate statement that the social network would make "major structural changes" to how it builds products and conducts business.
The broad strokes of the FTC settlement have been rumored for months and Facebook has already set aside the money to pay the fine, the largest the agency has levied against a tech company. In 2012, the FTC fined Google a record-setting $22.5 million.
Originally published July 23.
Update, July 24: Adds Zuckerberg statement.