In 2012, Facebook, Inc. (Facebook) entered into a consent order with the Federal Trade Commission (FTC), resolving allegations that the company misrepresented to consumers the extent of data sharing with third-party applications. Among other things, the 2012 FTC order required Facebook to establish a reasonable program to protect user privacy. After it was revealed that the firm Cambridge Analytica had harvested the personal data of millions of people’s Facebook profiles without their consent during the 2016 presidential election, the FTC eventually commenced a formal legal action against Facebook on July 24, 2019, in the U.S. District Court for the District of Columbia, alleging that Facebook had violated the 2012 order. On that same day, however, Facebook and the FTC also announced a settlement order in which Facebook agreed to pay a record-breaking $5 billion penalty to the FTC. The settlement order, however, did not mandate any payments to Facebook users; nor did it impose any personal legal liability on Facebook’s CEO, Mark Zuckerberg.

CASE QUESTIONS

1. Should Facebook users whose data was harvested by Cambridge Analytica without their consent receive compensation from the $5 billion penalty Facebook agreed to pay to the FTC?

2. Assume Facebook was unaware of what Cambridge Analytica was doing with its users’ data. Why should Facebook have to answer for the misdeeds of Cambridge Analytica?