FTC's Facebook Decision Draws Crowd

But record fine still not enough for some
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Reaction was swift to the FTC's announcement Wednesday (July 24) of its $5 billion fine and conditions on Facebook for the Cambridge Analytica info sharing debacle.

While the FTC said it was a sweeping and tough move, that was not the read from those looking for even more.

FTC Building

Rep. Frank Pallone (D-N.J.), chairman of the House Energy & Commerce Committee, thought the fine too little, and emphasized the need for Congress to act to protect privacy.

“While $5 billion is a record fine for the FTC, monetary damages are not enough," he said. "Facebook has repeatedly demonstrated that it prioritizes profit over people. Tough oversight is needed to prevent the abuse of consumer information by Facebook and other companies. Comprehensive privacy legislation is necessary to strengthen the FTC’s authorities and give it more enforcement tools and resources so that violating consumers’ privacy and breaking public trust isn’t just the cost of doing business.”

Republican Senator Josh Hawley of Missouri, a big critic of Big Tech, agreed there was not enough "there" there.

"This is very disappointing," he said. "This settlement does nothing to change Facebook’s creepy surveillance of its own users and the misuse of user data. It does nothing to hold executives accountable. It utterly fails to penalize Facebook in any effective way."

Sen. Ed Markey (D-Mass.) saw the decision as tantamount to a privacy "get out of jail free" card.

"With its settlement with Facebook, the FTC not only fell short, it fell on its face," said Markey, leaving the cooling senatorial saucer language for the Senate floor. "Facebook is getting away with some of the most egregious corporate bad behavior in the age of the internet. This settlement is a partisan abdication of the FTC’s duty. The only market-wide message the Commission is sending is that it is acceptable for online giants to beg for forgiveness afterward rather than get permission first. The FTC is giving little confidence to the American people that Facebook and other online companies will now have to operate within a new incentive structure that will end the profits-over-privacy status quo.

"This outcome is an insult to consumers, and it only increases the urgency for Congress to pass my Privacy Bill of Rights Act and my bipartisan update to the Children’s Online Privacy Protection Act. Congress must act now.”

Sen. Roger Wicker (R-Miss.), chairman of the Commerce Committee, agreed Congress needs to step in, but gave higher marks to the FTC's action.

“The settlement between the FTC and Facebook further stresses the need for a strong federal data privacy law," he said. "The details of Facebook’s conduct that were illuminated by the FTC’s investigation are troubling. This investigation and settlement, including a fine significantly larger than has ever been assessed by a privacy enforcer anywhere in the world, are examples of the great work the FTC can do. However, without a robust, comprehensive federal privacy law covering data collectors and consumers, bad actors will be able to continue to abuse data in the online marketplace.”

The Open Markets Institute was equally unhappy with the FTC action, saying it did not go nearly far enough, including that Facebook did not have to admit any guilt.

"The Open Markets Institute denounces the Federal Trade Commission’s (FTC) official $5 billion settlement with Facebook," it said in a statement. "Even as the FTC’s complaint alleges that Facebook committed major privacy violations, the FTC still failed to question Mark Zuckerberg and has not required an admission of guilt by the corporation, protecting Facebook from legal liability."

OTI wanted congressional action as well, but aimed at the FTC. "Open Markets reiterates its call for Congress to investigate the FTC’s failure to police our markets and enforce the law," it said. "Congress should no longer tolerate the FTC’s failures as an enforcer to protect our democracy, which have led to its crisis of legitimacy."

The Mercatus Center said the decision shows the system works.

The historic $5 billion fine is over 200 times the previous largest fine and higher than fines faced under Europe’s highly regulatory GDPR," said the Mercatus Center's data privacy expert, Jennifer Huddleston. "But the agreement includes many requirements and oversight of the company’s data practices including the establishment of an independent privacy committee. [T]his agreement illustrates that the American approach is able to provide significant redress while retaining the benefits of innovation and consumer choice regarding data driven products."

The Campaign for a Commercial-Free Childhood (CCFC), which has complained about edge provider business and children's privacy protection, or lack of protection, practices, was dissatisfied with the settlement.

"We agree with dissenting Commissioners Rohit Chopra and Rebecca Kelly Slaughter [both Democrats] that the FTC's settlement with Facebook is not strong enough," said CCFC Executive Director Josh Golin. "Specifically, we are extremely concerned that this settlement lets Facebook off the hook for violating kids' privacy and manipulating children and teens into making in-app purchases. As Commissioner Rohit Chopra noted in his dissent, the FTC has essentially given Facebook ‘a legal shield...covering a wide range of conduct not addressed in the proposed complaint or settlement.' It appears that the FTC will not hold Facebook specifically accountable for manipulating children, nor will they compel the company to change their practices regarding kids."

“With the Facebook settlement, the FTC appears to be stepping up its privacy enforcement," said Eric Null. senior counsel at New America’s Open Technology Institute. "But consumers should be skeptical that the settlement will lead to any effective change in online privacy protections or Facebook’s business practices—the company was rewarded on the stock market for the settlement, the settlement imposed no meaningful restrictions on Facebook’s data collection and sharing practices, and structural changes require a tenacious overseer to ensure compliance or they may lead to nothing.

Null agreed that one thing the decision signaled was the need for strong privacy legislation from Congress. "The FTC only achieved as much as it did because it had a prior consent decree in place. Without comprehensive privacy legislation, consumers will likely end up with more of the same."

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