A few days ago it emerged Facebook is facing a fine of around US$ 5 billion. Subject to approval by the US Department of Justice the fine will be levied by the Federal Trade Commission. It is one of the biggest fines the FTC has ever imposed.
Why was Facebook found wanting on this occasion? They promised to do something and didn’t. To put that in more technical language, Facebook violated the terms of a consent decree i.e. they entered into an agreement with the FTC in 2011 then broke it.
This violation is what gave rise to the Cambridge Analytica scandal (and who knows what else?). Is this an isolated incident – saying one thing but something else happens? No. In 2017 the EU fined Facebook US$112 million because when they acquired WhatsApp they told Commission officials something that was quite important but untrue although here, seemingly, it was unintentional. That changes things a bit, but not much.
What’s the craziest thing about the 5 billion penalty? Following the announcement Facebook’s share price went up on the New York Stock Exchange. The only explanation for this can be that Wall Street thought the punishment would be worse so they were rejoicing at the fact the company was let off so lightly. Facebook themselves had put aside US$3 billion to settle the case so I guess they might have been a little miffed it was greater than that but for them two billion dollars is small change.
According to a report in the Financial Times Facebook will not only have to hand over a lump of cash, the settlement will also lead to an
“overhaul of how the social media giant handles user data”
It is clear FTC staff will be crawling all over the company’s books and operations because
“the terms of the settlement… are very granular”
People in the UK who have been critical of the UK Government’s Online Harms White Paper, and specifically those who have criticised the Government for its alleged failure to produce “good enough evidence” to warrant the introduction of a new regulatory regime should reflect on this. Isn’t the real question “why has it taken the Government so long to wake up?” That is rhetorical. I think the Government has done the best it possibly could given all the circumstances.
And if you think I am being harsh on Facebook you should have a look at what Democrat Senator Sherrod Brown of Ohio had to say in last week’s hearings on Facebook’s proposal to establish Libra, a new crypto currency.
“Like a toddler who has gotten his hands on a book of matches…. Facebook has burned down the house over and over and called every arson a learning experience. We would be crazy to give them a chance to experiment with people’s bank accounts and to use powerful tools they don’t understand, like monetary policy, to jeopardise hardworking Americans’ ability to provide for their families.
(Facebook) has demonstrated through scandal after scandal that it doesn’t deserve our trust. It should be treated just as the profit-seeking corporation that it is, just like any other company …. Zuckerberg & co…. had proven over and over that they don’t understand governing or accountability; … they’re running a for-profit laboratory.”
If you want more of this read John Naughton’s piece in today’s Observer.
Going back to the White Paper, I get that it is not all about Facebook. I get that there is a lot in there about a wider range of concerns. However, when one of the world’s richest, most powerful internet businesses, one that sought to position itself somewhere adjacent to Mother Theresa and Albert Schweitzer, has so consistently been found to have been something else, isn’t it the case that our real anger should be directed towards ourselves? How did we manage to stay conned for so long? We all inhaled. Now the harsh reality is crowding in, and while I have no reason to suppose other tech businesses have behaved as badly as Facebook, equally there is no evidence which suggests they haven’t. Robust scepticism has to be the order of the day. And in that context only Governments can exercise the clout that is going to be required to put things right.
Desiderata 