Facebook has agreed to pay a £500,000 fine over the harvesting of its users data for political purposes by Cambridge Analytica, which was first exposed by the Observer and Channel 4 News.

As part of the agreement, the social network has made no admission of liability over the data breaches, which affected an estimated 87m Facebook users worldwide.

The fine was issued in October last year as part of an ongoing investigation by the Information Commissioner’s Office into the misuse of personal data in political campaigns.

Facebook appealed the fine a month later and in June this year the First Tier Tribunal, which heard the case, issued an interim decision that allegations of bias on the part of the ICO should be considered as part of the appeal.

It ruled the watchdog should be required to disclose materials relating to its decision-making process in issuing the fine against Facebook.

Facebook had argued that because the ICO found no evidence that UK user data was among that exposed to Cambridge Analytica, the fine no longer related to the data harvesting incident.

Both Facebook and the ICO have now dropped their appeals.

Facebook’s fine will be paid to HM Treasury, while the ICO and Facebook will each pay their own legal costs.

The agreement also allows Facebook to hold on to documents disclosed by the ICO during the appeal for the purposes of further investigating issues around Cambridge Analytica, which has since been shut down.

The ICO can also resume its wider investigation. The Information Commissioner is said to believe the agreement “best serves the interests of all UK data subjects who are Facebook users”.

Deputy commissioner James Dipple-Johnstone said: “The ICO’s main concern was that UK citizen data was exposed to a serious risk of harm.

“Protection of personal information and personal privacy is of fundamental importance, not only for the rights of individuals, but also as we now know, for the preservation of a strong democracy.

“We are pleased to hear that Facebook has taken, and will continue to take, significant steps to comply with the fundamental principles of data protection.

“With this strong commitment to protecting people’s personal information and privacy, we expect that Facebook will be able to move forward and learn from the events of this case.”

Harry Kinmonth, director and associate general counsel for Facebook added: “We are pleased to have reached a settlement with the ICO. As we have said before, we wish we had done more to investigate claims about Cambridge Analytica in 2015.

“We made major changes to our platform back then, significantly restricting the information which app developers could access.

“ Protecting people’s information and privacy is a top priority for Facebook, and we are continuing to build new controls to help people protect and manage their information.”

Facebook said it would continue to co-operate with the ICO’s wider investigation.

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