Facebook's stocks went up after news for a record $ 5 billion FTC fine for various privacy violations broke today.
As The New York Times Mike Isaac points out that here is the real story: the United States government has spent months punishing for a long list of Facebook with bad privacy behavior, the best she could do was so weak that Facebook's share price rose. From some other points of view, a $ 5 billion fine is a big deal, of course: this is the biggest fine in FTC's history, far greater than the $ 22 million fine imposed against Google in 2012, and $ 5 billion is a lot of money to be sure Just like everything else that comes in contact with the scale of Facebook is still too little: Facebook has had $ 1
The largest FTC fine in the history of the country represents a major month of Facebook revenue, and the company did so good work to telegraphing it to investors that the stock price went.
Here's another way to say this: The biggest FTC fine in the history of the United States has increased Mark Zuckerberg's net worth.
What lesson will you learn you of this?
This is actually the real problem here: fines and penalties are effective only when they provide negative consequences for bad behavior. But Facebook has done nothing but behave badly from the start, and it has only once been hit on the wrist by authoritative figures and rewarded by the market. Ultimately, Facebook has already been on a previous FTC decision on privacy violations imposed in 2011, and it does not stop any of the company's latest scandals. As Kara Swisher wrote, you need to add another zero to that fine to make it mean something.
"once violates the law, then violates it once you are under the command of a mammoth rock, then you violate it so many times that we all lose track of what is happening and you get a proportionately modest fine and we will continue to break things "- FTC to SV today. There are other elements of the agreement, as reported by Tony Rom in Washington Post : Facebook will have to document how it plans to use the data , before launching new products, Zuckerberg will have to promise that the company has protected the user's privacy. But none of these conditions will prevent Facebook from collecting and sharing data, and they will certainly not affect the maddening Facebook advertising business that relies on that data.
As Peter Kafka notes, regulatory compliance costs are not exactly dissuasive: Facebook will pay the fine, eat the cost of several more lawyers and PR people to ensure compliance with this new order, and continue issuing a new world currencies, while expose horrific videos to people who have been killed for 15 dollars per hour.
FTC simply gave Christmas a Christmas gift five months earlier. 12 July, 2019
Congressional members are already opposed to this agreement – Mr. David Cicilin calls it a "Christmas Gift" while Senator Ron Weiden says , that FTC is "unsuccessful" Senator Richard Blumenthal says the decision is "inadequate" and "historic hollow", and senator Mark Warner says "
Facebook made $ 5 billion in just for the first three months of last year. The company is too big to watch, and this drop-on punch confirms this. FTC has to break Facebook, simple and simple. It is enough.
– Elizabeth Warren (@SenWarren) July 12, 2019
Certainly there will be many statements and strong sentences of FTC in the coming weeks as the settlement is through a ministry's justice and inevitable approval. But words are just words. If our government will hold Facebook responsible for its reckless and irresponsible behavior, it must do so and in such a way that Mark Zuckerberg learns that the actions have consequences.