META Meta Platforms Inc

By John D. McKinnon 

WASHINGTON -- Several advocacy groups are urging the Federal Trade Commission to seek a breakup of Facebook Inc. as it weighs possible penalties against the social media company for privacy violations.

Facebook has acknowledged that the data firm Cambridge Analytica improperly obtained personal data of millions of users. The FTC is nearing completion of an investigation into the matter and is weighing penalties, including a substantial fine.

Among other remedies, "the FTC should require Facebook to unwind the acquisition of both WhatsApp and Instagram" for its failure to protect the data of those apps' users, according to a draft letter from the groups to the FTC. A copy of the letter, dated Jan. 24, was obtained by The Wall Street Journal.

"Facebook has operated for too long with too little accountability," said Marc Rotenberg, president of the Electronic Privacy Information Center, one of the groups expected to sign the letter. Others include Color of Change, which advocates racial justice, and Open Markets Institute, which promotes business competition.

WhatsApp is a text-messaging app and Instagram allows users to share photos and videos.

The FTC, which is now subject to the partial government shutdown, didn't respond to requests for comment. One legal expert said the commission was unlikely to seek a breakup but could impose a significant fine.

Facebook didn't immediately comment on the letter. Facebook officials don't believe the FTC has the legal grounds to tie any violation of the consent decree to a breakup of the company, according to a person familiar with Facebook's thinking.

The FTC in 2011 charged Facebook with deceiving consumers by promising they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public. The case was settled by a consent decree finalized in 2012.

Any new settlement is expected to include a substantial fine and strengthened consent decree, but the advocacy groups say the FTC must do more to re-establish its credibility as an enforcer and send a message.

Cambridge Analytica, which did work for the campaign of President Donald Trump, was suspended from Facebook's platform following the disclosure.

There is little evidence the FTC's Republican majority would support a breakup. But one of the five FTC commissioners, Democrat Rohit Chopra, has publicly advocated tougher penalties for companies that become repeat offenders, including management changes and divestiture of business lines.

David Vladeck, a former FTC consumer-protection official who is now a Georgetown University law professor, said a breakup is "not going to happen -- that's an antitrust remedy."

He predicted that fines could reach considerable levels, however, as a way of sending a message to the industry. "A nice round number like $1 billion would do it," Mr. Vladeck said.

Write to John D. McKinnon at john.mckinnon@wsj.com

(END) Dow Jones Newswires

January 23, 2019 18:38 ET (23:38 GMT)

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