WASHINGTON — Facebook’s announcement in late April that it had set aside $3 billion to $5 billion to settle claims that it mishandled users’ personal data suggested a strong consensus by federal regulators that the social media giant needed to be held accountable.
But the reality behind the scenes at the Federal Trade Commission is far more complicated, reflecting the politics and give-and-take of the negotiations.
The FTC’s five commissioners agreed months ago that they wanted to pursue a historic penalty that would show the agency’s teeth. But now, the members are split on the size and scope of the tech company’s punishment, according to three people with knowledge of the talks who spoke on the condition of anonymity.
The division is complicating the final days of the talks.
Along with disagreement about the appropriate financial penalty, one of the most contentious undercurrents throughout the negotiations has been the degree to which Mark Zuckerberg, Facebook’s chief executive, should be held personally liable for any violation of the agreement, according to two of the people.
Facebook has put up a fierce fight, saying Zuckerberg should not be held legally responsible for the actions of all 35,000 of his employees.
The talks could fall apart, but negotiations are still moving forward and are expected to conclude within days. This account of the FTC’s investigation of Facebook is based on interviews with a half-dozen people.
Joseph J. Simons, the commission’s Republican chairman, appeared to have the votes of the other two Republican commissioners, giving him the three needed to approve a deal. But a 3-to-2 decision along party lines, which Simons has said he wants to avoid, could lead to strong rebukes on Capitol Hill.
The stakes are enormous for the agency and Simons. The case is being closely watched globally as a litmus test on how the U.S. government will police the country’s tech giants.
The commission has a reputation of pulling some punches, particularly in contrast with regulators in Europe, who have pursued forceful action on both privacy and antitrust issues. The largest FTC fine against a tech company was $22.5 million against Google in 2012, for misleading users about how some of its tools were tracking them.
Any settlement will also be looked at as a measure of the Trump administration’s willingness to penalize one of the country’s most valuable and influential companies. The administration has whittled away regulations in many industries, but President Donald Trump has repeatedly said tech giants like Facebook and Amazon have too much power.
Many Democrats have led efforts to rein in Silicon Valley’s power.
“This is a hugely important decision because it will be watched by all these big companies to see if there is actually going to be a new day on the enforcement front,” said Sen. Ron Wyden, D-Ore., who has pushed for Zuckerberg to be held personally liable in any settlement.
Rohit Chopra, one of the two Democrats on the commission, has publicly urged stronger punishment of repeated offenders of FTC rules.
But Simons has appeared unwilling to force the issue and drag the case to court, which could be a risky move. He has recently intensified his efforts to get at least one of the two Democrats on his side, according to one of the people with knowledge of the talks. But the internal disagreements have held up a final agreement.
In addition to the fine, Facebook has agreed, as part of a proposed settlement, to create new positions that would be focused on privacy policies and compliance, two of the people said.