In what would be a record-breaking fine for the agency, the Federal Trade Commission may be getting ready to sanction Facebook for its violations of user privacy and misuse of data. The sum, expected to be between $3 billion and $5 billion, is potentially more firm back-hand thwack that it is a wrist-slap, as such fines have mostly been in the past.
Facebook can afford it of course, but the "one-time loss" it just reported in a first-quarter earnings report is nonetheless a dent in the company's potential profits for 2019. Facebook may be making around $56 billion in annual revenue these days, but as the New York Times notes, the expected fine means that the company's Q1 net income is down 51% from the same period last year due to this write-down.
A fine of $5 billion, if it goes that high, will put the American trade agency more in line with European regulators, who have already levied a $5.1 billion fine on Google — with more fines likely to come against Facebook. (As the Washington Post notes, the FTC fined Google a mere $22.5 million just a few years back, in what was then a record-breaking fine for them for a privacy violation.)
Still, speaking to the Times, vocal tech critic Matt Stoller calls $5 billion "a joke of a fine — a two-weeks-of-revenue, parking-ticket-level penalty for destroying democracy."
Former FTC chief technology officer Ashkan Soltani suggests that major FTC mandates that curbed Facebook's ability to share data with partners — or forced them to be more transparent about how much data they collect and how — would be far more meaningful to the company.
In related news, Democratic Sen. Ron Wyden urged the FTC on Tuesday to hold Zuckerberg "individually liable" for his company's misdeeds, given that he is both the public face of the company and its majority stakeholder. As the Washington Post reported, Wyden said, "Given Mr. Zuckerberg’s deceptive statements, his personal control over Facebook, and his role in approving key decisions related to the sharing of user data, the FTC can and must hold Mr. Zuckerberg personally responsible for these continued violations." The paper earlier reported that the FTC is in the midst of negotiations as to how it will punish the company and Zuck himself.
As Facebook noted in its report, "the matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome."
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