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Illustration: Sarah Grillo/Axios

The Federal Trade Commission has settled with Facebook over allegations that it "repeatedly used deceptive disclosures and settings to undermine users’ privacy preferences," in a deal that will apply some new oversight to its practices and force it to pay $5 billion.

Why it matters: Revelations last year that the political consultancy Cambridge Analytica had gathered a large trove of Facebook user data, and failed to get rid of it, set off a broader reckoning around data privacy in the era of Big Tech.

Details:

  • Facebook will pay $5 billion under the settlement for violating a 2012 agreement with the FTC.
  • The social giant will have to "conduct a privacy review of every new or modified product, service, or practice before it is implemented, and document its decisions about user privacy," the agency said.
  • The deal establishes a privacy committee on Facebook's board and makes chief executive Mark Zuckerberg personally part of the process of complying with the new restrictions.
  • Separately, the company reached a $100 million settlement with the Securities and Exchange Commission for "making misleading disclosures regarding the risk of misuse of Facebook user data."
  • Before going into effect, the settlement needs the approval of a federal court.

What they're saying: Zuckerberg said in a post that as a result of the deal, Facebook was "going to make some major structural changes to how we build products and run this company."

Yes, but: Democratic policymakers were critical of the settlement, which was approved by the Republican-controlled FTC along party lines.

  • "Even though this settlement is historic, in order to support it I would have to be confident that its combined terms would effectively deter Facebook from engaging in future law violations and send the message that order violations are not worth the risk," said Democratic FTC Commissioner Rebecca Kelly Slaughter in her dissent from the vote approving the settlement.
  • "I do not believe that is the case," she said.

The FTC also sued Cambridge Analytica, and settled with its former top executive and the developer responsible for making the app that collected the Facebook data in question.

The big picture: The settlement will roil an already active debate among lawmakers and advocates over how to best regulate data-hungry online services like Facebook.

  • The FTC announced the deal Wednesday only after it had briefed key congressional committees on its contents, according to a Capitol Hill aide familiar with the matter.

What's next: Facebook has its earnings call on Wednesday afternoon.

Go deeper:

Go deeper

Biden will reverse Trump's attempt to lift COVID related travel restrictions

Photo: Tasos Katopodis via Getty

The incoming Biden administration will reverse President Trump's last-minute order to lift COVID-19 related travel restrictions, Jen Psaki, the incoming White House press secretary, tweeted.

Why it matters: President Trump ordered entry bans lifted for travelers from the U.K., Ireland, Brazil and much of Europe to go into effect Jan. 26, but the Biden administration will "strengthen public health measures around international travel in order to further mitigate the spread of COVID-19," Jen Psaki said. Biden will be inaugurated on Wednesday, Jan. 20 and Trump will no longer be president by the time the order is set to go into effect.

Dominion sends cease and desist letter to My Pillow CEO Mike Lindell

Photo: Stephen Maturen/Getty Images

Dominion Voting Systems on Monday sent a cease and desist letter to My Pillow CEO Mike Lindell over his spread of misinformation related to the 2020 election.

Why it matters: Trump and several of his allies have pushed false conspiracy theories about the company, leading Dominion to take legal action. It's suing pro-Trump lawyer Sidney Powell for defamation and $1.3 billion in damages, and a Dominion employee has sued Trump himself, OANN and Newsmax.

Off the Rails

Episode 5: The secret CIA plan

Photo illustration: Aïda Amer, Sarah Grillo/Axios. Photo: Zach Gibson/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 5: Trump vs. Gina — The president becomes increasingly rash and devises a plan to tamper with the nation's intelligence command.

In his final weeks in office, after losing the election to Joe Biden, President Donald Trump embarked on a vengeful exit strategy that included a hasty and ill-thought-out plan to jam up CIA Director Gina Haspel by firing her top deputy and replacing him with a protege of Republican Congressman Devin Nunes.