At $5 billion, it’s the largest fine in U.S. history for a privacy violation—and it comes with an increased burden of government scrutiny for the next two decades. In the settlement between the Federal Trade Commission (FTC) and Facebook, announced Wednesday after 16 months of investigation, the agency delivered a “stunning rebuke” to the social network as a repeat offender, as the Washington Post described it.
“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” FTC chairman Joe Simons said in a statement. Facebook’s general counsel, Colin Stretch, said the settlement would “mark a sharper turn toward privacy, on a different scale than anything we’ve done in the past.”
In going after Facebook, the FTC accused the company of violating a consent decree it had struck with the agency in 2011, when Facebook promised to improve its privacy protections. After several more recent mishaps, most notably when the political consultancy Cambridge Analytica obtained personal data on 87 million Facebook users, the FTC renewed its pursuit of tougher consumer safeguards.
Even with this new agreement, however, critics of the deal feel that Facebook got off lightly. The company didn’t have to admit guilt, its founder Mark Zuckerberg wasn’t singled out for rebuke in the settlement, and the deal doesn’t really challenge Facebook’s business model for monetizing its users’ information, critics said. The two Democrats on the FTC panel both voted to reject the deal, with member Rebecca Kelly Slaughter arguing that the FTC should have gone to court to pursue tougher fines and conditions, rather than settling.
The decision comes at a time when America’s dominant tech platforms—in particular Amazon, Facebook and Google—have gone from being revered as economic superstars to serving as popular political targets.
“Only Big Tech could bring together [Attorney General] Bill Barr and Elizabeth Warren,” declared CNBC. The companies are “politically caught in the crosshairs,” Brian Yacktman, founder of YCG Investments, told the network. “What’s bipartisan is that people are concerned about companies having too much power and too much control over data so they want regulation.”
In a Presidential campaign season, the debate is broadly over how to curb that power, whether it’s by regulating the companies through new legislation, or by pursuing antitrust action to limit their powers.
On the same day the FTC announced its Facebook action, Barr’s Justice Department opened a major antitrust investigation of the big tech companies to find out “whether their online platforms have hurt competition, suppressed innovation or otherwise harmed consumers,” the Associated Press reported. “Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsible to consumer demands,” the department’s chief antitrust officer, Makan Delrahim, said in a statement.
The backlash against corporate invasion of privacy is happening not only at the federal level, but locally as well. The New York City Council, for example, is considering a bill to ban the sale of cellphone-location data.
“The bill, which was introduced on Tuesday, would make it illegal for cellphone companies and mobile app developers to share location data gathered while a customer’s mobile device is within the five boroughs,” the New York Times reported. “Cellphone companies and mobile apps collect detailed geolocation data of their users and then sell that information to legitimate companies such as digital marketers, roadside emergency assistance services, retail advertisers, hedge funds or—in the case of a class-action lawsuit filed against AT&T—bounty hunters.” New York would be the first city to impose such a ban.