The FTC would hit Facebook with a record $ 5 billion settlement

After months of According to several reports, the Federal Trade Commission sentenced Facebook to a record $ 5 billion fine on Friday for violating privacy. The sanction comes after an investigation that lasted more than a year and marked by an order of magnitude the largest in the history of the agency. If approved by the civilian division of the Department of Justice, it will also be the first substantive sanction imposed on Facebook in the United States, where the technology sector is largely unregulated. But Washington has recently taken a tougher stance on Silicon Valley, and Friday's announcement marks its most aggressive action so far to limit its invasion of privacy.

Full details of the settlement were not available Friday afternoon, and the FTC and Facebook declined to comment. The Wall Street Journal first reported the news. It is not clear how long it will take the Department of Justice to review the conditions. Meanwhile, important issues remain unresolved, including whether the FTC has chosen to personally hold Facebook CEO Mark Zuckerberg for the privacy breaches of the company, and the type of external control that Facebook has to submit in the future.

The FTC opened its investigation into Facebook's data practices last March, a week after the announcement that Cambridge Analytica, a political consulting firm that collaborated with the Trump campaign in 2016, had improperly obtained information. on tens of millions of Facebook users. The data was purchased from an academic who used a personality profiling application to collect information not only from willing users, but, thanks to Facebook's lax privacy policy at the time, from all friends of these users, without their knowledge. Facebook did not cut this access until 2015.

But in 2011, Facebook had promised the FTC not to share data with third parties without the affirmative consent of users, as part of a settlement agreement over charges that the company had misled consumers about its privacy practices. It seems that the regulator has found that Facebook violated this decree of consent.

The reported fine far exceeds the FTC's most significant privacy sanction, namely a $ 22.5 million strike against Google in 2012 over its privacy policy. Safari browser. But even $ 5 billion would represent a drop in Facebook's basket, which generated $ 15 billion in revenue in the last quarter. When Facebook announced in its first quarter results that it set aside $ 3 billion to $ 5 billion to cover settlement costs, its share price has skyrocketed.

Some of Facebook's biggest critics had already expressed doubts that any amount of money could adequately punish a company the size of Facebook. "They can inflict a very big fine, which is just a parking ticket," Matt Stoller, a member of the anti-monopoly think tank Open Markets Institute, told WIRED recently. "We do not think a fine counts. We need a structural solution here.

In a letter to the FTC in early May, Senators Richard Blumenthal (D-Connecticut) and Josh Hawley (R-Missouri) said the FTC should "impose radical changes to end the trend of the network. social abuse and misuse of personal data.

"Personal responsibility must be recognized from the top of the works council to the product development teams," reads the letter. "If the FTC discovers that a Facebook official has knowingly broken the consent order or breaks the law, she must name it in any further action." Whether the FTC has done so or not, remains one of the biggest outstanding issues around this settlement, all the more so than intriguing after the recent disclosure of emails, again The Wall Street Journal, which seem to indicate that Zuckerberg was aware of the company's "dubious" privacy practices.

The Cambridge Analytica scandal led to a growing awareness of data rights in the United States, as Facebook and other technology companies were repeatedly called upon to respond to broken promises and failures in the US. to protect the data of users. The seeming decision of the FTC is part of a growing demand for more shares to control Big Tech. In Congress, lawmakers on both sides of the aisle have called for federal legislation to protect the Americans' right to privacy, while several state legislatures have already passed or are considering their own bill on the protection of privacy. private life.

Big Tech concerns are not limited to confidentiality either. The FTC has formed a task force to investigate past and past industry mergers early in the year. Now, together with the Department of Justice, major corporations like Facebook and Google would be looking at antitrust concerns. Senator and Massachusetts Democratic presidential candidate Elizabeth Warren proposed splitting technology platforms that also do business on these platforms and reviewing past mergers, including Facebook's acquisition of Instagram and WhatsApp. . A number of conservative politicians, including President Trump, have accused social media companies of bias and liberal censorship.

New details also emerged about how Facebook had negotiated special data agreements with device makers and large companies, even after the severe crackdown on data access in 2015. Russian giant of the internet, Mail.ru, has enjoyed extensive access. Facebook has also suffered a massive data breach, revealing some 30 million accounts.

And earlier this year, TechCrunch released a report detailing the use of an application called Research to observe every movement made by users on their phones in order to spy on the competition. In addition, Facebook used a loophole to distribute the application to iPhone users, after Apple launched another similar Facebook application, from its App store.

All this has caused a change of heart – or at least a change in public positioning – for society. In March, Facebook CEO Mark Zuckerberg launched a privacy roadshow, revealing for the first time in a long publication on his blog his vision of a new type of social network focused on privacy. This social network would focus on messaging, allowing people to send end-to-end encrypted messages via Facebook Messenger, Instagram and WhatsApp, and move on to new areas such as payments and commerce. Later this month, Zuckerberg wrote an editorial in The Washington Post, expressing its support for regulations focusing on "harmful content, electoral integrity, confidentiality and portability of data".

"I think Facebook has a responsibility to help solve these problems, and I look forward to discussing them with lawmakers around the world," wrote Zuckerberg. "But people should not have to rely on individual companies to solve these problems themselves. We should have a broader debate about what we want as a society and how regulation can help. "

Facebook and other technology companies have spent years lobbying for regulations, including a California Privacy Bill and federal regulations that would have strengthened oversight of privacy laws. digital political advertising.

The fine reported to the FTC, however cumbersome, does not mean that the company's regulatory problems are over. Facebook still faces many investigations in the United States. The Securities and Exchange Commission launched a survey last year following the revelations of Cambridge Analytica. Earlier this year, Facebook's data transactions with other companies sparked a criminal investigation by federal prosecutors in the Eastern District of New York. The company is also facing a lawsuit filed by the US Department of Housing and Urban Development, in April, following allegations that its advertising platform would have allowed discrimination in housing. When rumors of possible antitrust investigations were leaked last month, reports described the FTC negotiating a claim for future Facebook searches. And that even before arriving in Europe, where the general law on data protection has clearly put Facebook on the line of sight of European regulators.

If approved, the FTC's apparent settlement on Friday would set a precedent for how federal regulators plan to approach the tech giants in an era of growing awareness of data rights. . But no more than $ 5 billion will result in real change without a comprehensive reform to support.

---

More great cable stories