Facebook's stock went up after the news of a record breaking $ 5 billion FTC fine for various privacy violations today.
The thing that New York Times Mike Isaac points out is the real story here: US government spent months punishing Facebook's long list of privacy-related bad behavior, and the best it could making was so weak that Facebook's share price went up.
From a few other perspectives, it is very good that $ 5 billion is a big deal: it is the largest fines in the FTC story, much larger than the $ 22 million fine charged to Google in 201
The largest FTC final in the country's history is basically a month with Facebook's revenue, and the company did such a good job of telegraphing it to investors that the stock price went up.
Here's another way of saying it: the biggest FTC fines in US history increased Mark Zuckerberg's net value.
What lesson would you learn from it? Should anyone?
In fact, this is the real problem here: fines and penalties are only effective when they have negative consequences for bad behavior. But Facebook has done nothing but work poorly from the beginning, and it has just been snapped up on the wrist of government figures and rewarded by the market. After all, Facebook, was already according to a previous FTC consent declaration for privacy violations introduced in 2011, and it did not seem to stop any of the company's recent scandals. As Kara Swisher has written, you need to add another zero to this fine to make it all.
"breaks the law once and then breaks it again after you have consent orders on the mammoth scale and then breaks it as many times as we all lose what happens, and you get proportionally modest and continue to break things" – FTC to SV today.
– Lindsey Barrett (@LAM_Barrett) July 12, 2019
There are other parts to the deal that Tony Romm reported on Washington Post : Facebook must document how it plans to use data before launching new products and executing as Zuckerberg must promise the company has protected user protection. But none of these conditions will prevent Facebook from collecting and sharing data, and they will certainly not affect Facebook's insanely lucrative advertising business, based on the data.
And, as Peter Kafka notes, the cost of supervisory fees is also not exactly deterrent: Facebook pays the fine, eats the cost of some more lawyers and PR people to ensure that this new order is followed and continues business off, you issue a new worldwide currency while exposing underpaid entrepreneurs to scary videos of people murdered for $ 15 an hour.
FTC only gave Facebook a Christmas gift five months early.
– David Cicilline (@davidcicilline) July 12, 2019
Members of Congress are already opposed to this solution – Rep. David Cicilline calls it a Christmas present, while Senator Ron Wyden says The FTC has "miserably failed" Senator Richard Blumenthal says the decision is "inadequate" and "historically hollow" and Senator Mark Warner "" It's time for Congress to act. "Facebook made $ 5 billion in avits only the first three months of last year. The company is too big to monitor, and this drop-in-the-bucket penalty confirms it. The FTC will break up Facebook, simply and easily. Satisfaction is enough.
– Elizabeth Warren (@SenWarren) July 12, 2019
There will surely be many more statements and strongly formulated condemnations by the FTC over the next few weeks, as the conciliation goes through the Justice Department Review and Inevitable Approval. But words are just words, really. Indeed, if our government will hold Facebook accountable for its ruthless and irresponsible behavior, it must do so, and so Mark Zuckerberg learns that actions have consequences.