Its share price jumped by nearly 2% after reports of the record-breaking fine emerged on Friday.
The news: Facebook is set to be fined $5 billion by the Federal Trade Commission, the US competition watchdog, according to reports from the Wall Street Journal and the Washington Post. The 3-2 vote in favor of the settlement stuck to party lines, with Republicans voting for it and Democrats against. It’s the largest fine ever levied by the FTC, yet when the news broke, Facebook’s share price rose by nearly 2% during late trading on Wall Street. That added about $10 billion to its market value, more than double the cost of the fine.
Why? It’s because the settlement doesn’t challenge anything about the way Facebook collects and shares data, and thus won’t affect its very profitable business model, which relies on advertising.
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