Facebook Inc. (FB) and the Federal Trade Commission currently are negotiating details of a settlement related to the Cambridge Analytica scandal, the Washington Post reported, citing people familiar with the matter.
The penalty imposed by the FTC likely would be a multi-billion dollar fine, which would easily be the largest fine ever issued to a tech company by the FTC. In 2012, Alphabet Inc.'s (GOOGL) Google was fined $22.5 million by the agency for user privacy offenses.
The two sides are still negotiating the amount of the fine. If no agreement is reached, the FTC could take the issue to court, according to the Washington Post.
Facebook's privacy issues date back to 2012. Facebook settled a case with the FTC in August 2012, when the two parties reached an agreement that "Facebook must obtain consumers' consent before sharing their information beyond established privacy settings," according to a press release from the FTC published at the time the deal was made.
Facebook's privacy issues continued last March when news broke that Cambridge Analytica, a political research company, had harvested user data beyond what was acceptable. It later became evident that Facebook likely was aware of Cambridge's actions on the platform.
Facebook's user growth, and subsequently its revenue growth, has decelerated in the European Union after GDPR (General Data Protection Rule) went into effect in May. The rule makes it clearer to users what the risks of being on the platform are, and more importantly, obliges Facebook to get highly explicit consent from users before using their data for advertisers.
Since then, there have been other user security and privacy issues on Facebook, including an incident in September when 50 million user accounts were hacked.
The stock was down 0.27% to $163.50 a share in premarket trading. The stock has declined 5.5% since March 19, when news of the Cambridge Analytica scandal broke.