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What has just happened? The big story yesterday was the FTC hitting Facebook of a record $ 5 billion fine, as a result of numerous scandals related to personal data processing. But the markets seemed pleased with the fine and increased Facebook's market capitalization by more than $ 10 billion, completely canceling the punitive action.
Yesterday, we announced that the Federal Trade Commission (FTC) has fined Facebook $ 5 billion to punish a series of offenses, scandals and controversies.
In virtually any other context, a fine of $ 5 billion would be enormous – not only as a punitive measure, but also by pointing out how much the company in question mediocre way. But in the context of Facebook, given its size, reach and value, $ 5 billion is nothing more than a slap. So much so that, following the announcement of the FTC's decision, the social media giant's share price increased by 1.81%, adding $ 10.4 billion to its market value.
The markets rewarded Facebook for taking off so lightly, covering the cost of the fine and adding an additional $ 5 billion to the company's coffers.
Many have been quick to point to the flaw in this effort to hold such a gigantic company to account. Senator and Democratic presidential candidate Elizabeth Warren called the decision a "downward penalty", tweeting our renewed calls for the demolition of Facebook.
Facebook made $ 5 billion in profits in the first three months of last year. The company is too big to be able to supervise it, and this unequivocal retention penalty confirms it. The FTC should break Facebook, with ease. Too much is too much.
– Elizabeth Warren (@SenWarren) July 12, 2019
There's no doubt that $ 5 billion is a lot of money, but since Facebook made $ 22 billion in profits last year and $ 15 billion in revenue the previous quarter, many people think that punishment does not fit the crime.
It must be said that the decision of the FTC was not only monetary. According to the Washington Post, Facebook "may need to document every decision made regarding the data before proposing new products, more closely monitor third-party applications that exploit users' information, and ask its executives, including CEO Mark Zuckerberg, to attest that the company has sufficiently protected the privacy. Although it seems reasonable to wonder why none of this was required.
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