Facebook's stock went up $ 5 billion FTC fine for various privacy violations broke today.
That, as the New York Times' Mike Isaac points out: "The bad news is that it's not so bad." Facebook's stock price went up.
From some other perspectives, that's $ 5 billion fine in FTC history, far bigger than the $ 22 million fine levied against Google in 2012. And $ 5 billion is a lot of money, to be sure , Facebook had $ 15 billion in revenue last quarter, and $ 22 billion in. It's just that profit last year.
The largest FTC fine in the history of the country is basically a month of Facebook's revenue, and the company did a good job of telegraphing it.
Mark Zuckerberg's net worth.
What would lesson you learn from that? Would anyone?
That's actually the real problem here: fines and punishments are only effective when they provide negative consequences for bad behavior. But Facebook has done nothing but behave badly inception, and it has only ever been slated on the wrist by authority figures and rewarded by the market. After all, Facebook what already under a previous FTC consent decree for privacy violations in 2011, and that did not seem to stop any of the company's recent scandals from happening. As Kara Swisher has written, you have to add another zero to this fine to make it mean anything.
"violate the law once, then violate it again after you have consented at a mammoth scale, then violate it so many times that we all lose track of what's happening, & you'll get a proportionate modest fine & get to continue breaking things "- the FTC to SV today.
– Lindsey Barrett (@LAM_Barrett) July 12, 2019
There are other elements to the settlement, as Tony Romm at the Washington Post It has been reported that sugarberg wants to have the company has protected user privacy. It's not Facebook's Facebook page, but it's not Facebook's insanely lucrative ad business, which relies upon that data.
And as Peter Kafka notes, "We want to pay the fine, eat the cost of a few more lawyers and PR people to ensure compliance with this new order, and carry on with the business of, uh, issuing a new worldwide currency while exposing underpaid contractors to horrifying videos of people being murdered for $ 15 an hour.
The FTC just gave Facebook a Christmas present five months early.
– David Cicilline (@davidcicilline) July 12, 2019
David Cicilline is calling it a "Christmas present," while Senator Ron Wyden says the FTC has "failed miserably." Senator Richard Blumenthal says the decision is "inadequate" and "historically hollow," and Sen. Mark Warner says "It's time for Congress to act."
Facebook made $ 5 billion in profits in just the first three months of last year. The company is too big to oversee, and this drop-in-the-bucket confirms that. The FTC should break up, plain and simple. Enough is enough.
– Elizabeth Warren (@SenWarren) July 12, 2019
There are many more statements and strong-spoken condemnations of the FTC in the weeks ahead, as the settlement goes through Justice Department review and inevitable approval. But words are just words, really. Facebook accountable for its reckless and irresponsible behavior, it has to actually do it, and in such a way that Mark Zuckerberg learns that actions have consequences.