Facebook's stock has disappeared up after news of a record-breaking FTC fine of $ 5 billion for various privacy violations broke today.
That, if the New York Times & # 39; Mike Isaac points out, the real story is here: the United States government spent months coming up with a punishment for Facebook & # 39; s long list of privacy-related bad behavior, and the best thing it could do was weak that the share price of Facebook went up.
From other perspectives, the $ 5 billion fine is of course a big deal, it is the largest fine in FTC history, much larger than the $ 22 million fine imposed on Google in 2012. And $ 5 billion is a lot of money, to be sure. It is just like everything else that comes into contact with the Facebook scale, it is still too small: Facebook alone had $ 15 billion in sales in the last quarter and $ 22 billion in profit last year.
The largest FTC fine in the country's history actually represents a month of Facebook's earnings, and the company has done so well to let investors know that the stock price went up.
Here's another way to say it: the biggest FTC fine in the history of the United States increased Mark Zuckerberg's assets.
Which lesson would that be? you learn from it? Would anyone
That is actually the real problem here: fines and penalties are only effective if they have negative consequences for bad behavior. But Facebook has done nothing but behave badly from the start, and it has only ever been beaten by authorities and rewarded by the market. After all, Facebook was already below a previous FTC consent decree for privacy violations that was imposed in 2011and that didn't seem to stop the recent scandals of the company.
"break the law once, then violate it again after you get permission on a gigantic scale, and then violate it so many times that we all lose track of what's happening, and you get a relatively modest fine and go to keep breaking things "- the FTC to SV today.
– Lindsey Barrett (@LAM_Barrett) July 12, 2019
There are other elements to the settlement such as Tony Romm on the Washington Post has reported: Facebook will have to document how it plans to use data before launching new products, and execs such as Zuckerberg will have to promise that the company has protected user privacy. 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 that relies on that data.
And if Peter Kafka notesAlso the legal compliance costs are not exactly a deterrent: Facebook pays the fine, eats the costs of a few more lawyers and PR people to ensure compliance with this new order and continues to issue a new global currency while underpaid Contractors are exposed to gruesome videos of people being murdered for $ 15 per hour.
The FTC has given Facebook a Christmas gift five months earlier.
– David Cicillin (@avidcicillin) July 12, 2019
Members of Congress are already against this arrangement – Rep. David Cicilline calls it a "Christmas gift" while Senator Ron Wyden says the FTC has "failed miserably". Senator Richard Blumenthal says the decision is "inadequate" and "historically hollow", and Senator Mark Warner says "It's time for Congress to act."
There will undoubtedly be many more FTC statements and strong-worded convictions in the coming weeks, as the settlement goes through the Ministry of Justice revision and unavoidable approval. But words are really just words. If our government holds Facebook responsible for its reckless and irresponsible behavior, then it must be do it, and in such a way that Mark Zuckerberg discovers that actions have consequences.