(Reuters) - The U.S. Federal Trade Commission approved a roughly $5 billion settlement with Facebook Inc (FB.O) this week over its investigation into the social media company’s handling of user data, a source familiar with the situation said on Friday.
The FTC has been investigating allegations Facebook inappropriately shared information belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica. The probe has focused on whether the sharing of data and other disputes violated a 2011 consent agreement between Facebook and the regulator.
Shares of Facebook rose after the news was reported by the Wall Street Journal earlier on Friday and closed up 1.8%. Facebook earlier this year said it had set aside $3 billion to pay for what it said could be a $5 billion penalty.
The settlement would be the largest civil penalty ever paid to the agency.
The FTC and Facebook declined to comment.
While the deal resolves a major regulatory headache for Facebook, the Silicon Valley firm still faces further potential antitrust probes as the FTC and Justice Department undertake a wide-ranging review of competition among the biggest U.S. tech companies. It is also facing public criticism from President Donald Trump and others about its planned cryptocurrency Libra over concerns about privacy and money laundering.
The Cambridge Analytica missteps, as well as anger over hate speech and misinformation on its platform, have also prompted calls from people ranging from presidential candidate Senator Elizabeth Warren to a Facebook co-founder, Chris Hughes, for the government to force the social media giant to sell Instagram, which it bought in 2012, and WhatsApp, purchased in 2014.
But the
