The fine is the largest ever imposed by the FTC against a tech company, topping the previous high set in 2012 by Google when it was hit with a $22.5 million fine for its privacy practices. It’s also the biggest fine ever levied against a company for violating consumers’ privacy.
Many wondered whether the multi-billion dollar penalty would be used to fuel further research into Facebook’s data practices, beef up the FTC’s enforcement around privacy or even be paid out to the Facebook users who the FTC says were deceived by Facebook’s handling of their personal data.
However, the fate of the $5 billion fine is much simpler. Federal law requires that the fine be directed to the U.S. Treasury’s general fund, according to the FTC.
It’s up to federal officials to determine how the general fund, often referred to as “America’s Checkbook,” will be spent.
“By law, this money goes to the U.S. Treasury. There’s nothing else that can be done with the money,” James Kohm, head of the FTC’s enforcement unit, said during a press conference on Wednesday. “I just know that this amount of money pays back the Treasury for approximately the last 25 years of the agency’s operations.”
In some FTC cases, the agency will earmark money to pay out to consumers seeking redress or use it to fund consumer education.
But Facebook’s FTC settlement will go straight to go to the U.S. Treasury, meaning Facebook users don’t have the option to receive compensation and it won’t help boost the FTC’s resources, which are stretched thin under its $306 million budget.
The $5 billion is a fraction of Facebook’s overall revenue, representing approximately 9% of the company’s 2018 revenue.