The stock of Facebook went up after news of a record fine of $ 5 billion FTC for various privacy breaches broke out today.
What, like The New York Times & # 39; Mike Isaac points out that the real story is this: the US government has spent months proposing a punishment for Facebook's long list of misconduct, and the best thing could be that the low price of Facebook Facebook action has increased.
From other points of view, this $ 5 billion fine is a big problem, of course: it's the biggest fine in the history of the FTC, well above the $ 22 million fine imposed on Google. 2012. And $ 5 billion is a lot, of course. . Like anything that comes into contact with Facebook's scale, it is still too small: Facebook has generated $ 15 billion in revenue in the last quarter and $ 22 billion profit last year.
The largest FTC in the country's history represents a month of Facebook revenue, and the company has such a good job of telegraphing to investors that the price of the shares has increased.
Here's another way of saying it: The FTC's biggest fine in US history has increased Mark Zuckerberg's net worth.
What lesson would you to learn from this? Someone would he want?
This is the real problem: goals and punishments are only effective when they have negative consequences for bad behavior. But Facebook has done nothing but behave badly since its inception and has only been hit by authority figures and rewarded by the market. After all, Facebook was already under a previous FTC consent decree for breach of privacy in 2011, and this does not seem to hinder any of the company's recent scandals. As Kara Swisher wrote, you have to add another zero to this fine for that to mean anything.
"Violate the law once, then again after a violation of your consent, then violate it so many times that we all lose count of what is happening and you will get a proportionally modest fine and will get to keep breaking things" – the FTC at SV today.
– Lindsey Barrett (@LAM_Barrett) July 12, 2019
The Regulation contains other elements, such as Tony Romm at Washington Post you reported: Facebook will have to document how it plans to use the data before launching new products, and officials like Zuckerberg will have to promise the company to protect the privacy of its users. But none of these conditions will prevent Facebook from collecting and sharing data, and they will certainly not affect the extremely lucrative activity of Facebook, which relies on this data.
And like Peter Kafka note, regulatory compliance costs are also not a deterrent: Facebook will pay the fine, the cost of some additional lawyers and public relations representatives to ensure compliance with this new order, and will continue to activities, uh, the issuance of a new world currency while exposing underpaid contractors to horrific videos of people murdered for $ 15 an hour.
The FTC just gave Facebook the Christmas gift five months ago.
– David Cicilline (@davidcicilline) July 12, 2019
Members of Congress Already Oppose This Rule – Representative David Cicilline Calls "Christmas Present", While Senator Ron Wyden said the FTC "failed miserably". Senator Richard Blumenthal said the decision is "inadequate" and "historically hollow", and Senator Mark Warner said "It's time for Congress to act."
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. Enough is enough.
– Elizabeth Warren (@SenWarren) July 12, 2019
There will certainly be many more statements and convictions from the FTC in the coming weeks, when the settlement goes through a review by the Department of Justice and inevitable approval. But words are just words, really. If our government holds Facebook responsible for its irresponsible and irresponsible behavior, it must in fact make and so that Mark Zuckerberg learns that acts have consequences.