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Recently, Facebook agreed to settle a data privacy issue by paying 5 billion dollars in the United States, in an action brought by the FTC. What does the government do with all that money?

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The money goes into the federal government funds, where it gets mixed with all the other sources of income and indistinguishable from money from those sources.

RedGrittyBrick explains why this money is not much when compared with the USA Federal Budget and most likely will not mean any change of policies. Now there are some possibilities of how this money is incorporated:

  • It is incorporated into future budgets. That Facebook has been fined does not mean that tomorrow it will pay $5B. It can ask to do the payments in the future and, if the government agrees with it, when making the budget for the next years there will be already be a line of "Facebook fine --> $X millions" in the income section of the budget. It would not be different from any other expected income.

  • If Facebook pays the fine (or part of it) during this fiscal year, that money will be an unexpected income. But since there are usually some expected incomes that fail to materialize, or unexpected expenses that appear, it can be used to compensate for those. Or it could be part of a budget surplus, ready to be used in next year's budget.

    In any case, given how big the USA budget is, and how big uncertainties are (fines like those, but also economic cycles, catastrophes, etc.) it would be very difficult (and pointless) to establish a direct link between this fine and any possible budget surpluss(or a reduction in deficit) at the end of year.

  • Funds. Right on then. I cannot upvote because of my low scores here but in all sense of gratitude, thank you for enlightening me. – Anupam Dash Sep 21 at 19:46
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Facebook was fined 5 billion dollars

The federal budget is around 3800 billion dollars, federal debt is around 22000 billion dollars.

So this is a fairly tiny amount, comparatively, and perhaps allows federal debt to grow by a tiny tiny bit less than might have been the case otherwise.

  • I didn't think it'd be related to the debt... Thanks for that @RedGrittyBrick – Anupam Dash Sep 21 at 18:34
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    @AnupamDash It is not related to debt. It is just money that goes into the government coffers, to be spent as decided by the Congress in the budget. RedGrittyBrick's answer only explains that while that kind of money seems important to you, it is little more than a rounding error when you compare it with the USA budget so it will not affect policy much (no "since we got the money from Facebook then we will no longer collect taxes!" law) – SJuan76 Sep 21 at 19:28
  • I'm new to the US economy's debt figure... I'm letting it sink in now – Anupam Dash Sep 21 at 19:30
  • The relevant comparation is with the budget. Even if USA's debt was 0, that money would not be significative as it is slightly over a 0,01%. If USA's budget was $100 million, then this money would be very significative. – SJuan76 Sep 21 at 19:32
  • Thanks for the edits too. – Anupam Dash Sep 21 at 19:48
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Because abuse of the fine levying and payment process under the Obama administration --where his administration first reduced fine amounts and then directed fine payment to liberal groups and cronies-- fines are now required by DOJ rule to go first to victims then to the general Treasury.

"When the federal government settles a case against a corporate wrongdoer, any settlement funds should go first to the victims and then to the American people — not to bankroll third-party special interest groups or the political friends of whoever is in power," Sessions said in a statement Wednesday. "Unfortunately, in recent years the Department of Justice has sometimes required or encouraged defendants to make these payments to third parties as a condition of settlement. With this directive, we are ending this practice and ensuring that settlement funds are only used to compensate victims, redress harm, and punish and deter unlawful conduct."

In some cases they can go directly to correct harms.

Under Sessions’ policy, settlement funds not going to victims or for services in connection with the case will go to the U.S. Treasury. Exceptions are payments that directly remedy the harm addressed in the settlement, including the “environment or from official corruption,” and those “expressly authorized by statute, including restitution and forfeiture.”

You can see this policy working directly now. For example, in the Equifax data breach settlement in 2017 that was entered into after Session's policy change, individuals can file a claim for $125 individually here.

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