The FTC settled with Facebook on data privacy.
In the last year, news kept coming out about how the social media giant mishandled user data, including taking phone numbers collected for two-factor authentication and using them for marketing, saving passwords unencrypted, and asking users their passwords to other services. Despite the $5 billion fine, the settlement has been widely panned by the technology press as a slap on the wrist.
The size of the fine is not meaningful in the context of Facebook’s massive advertising business that generated $16 billion revenues in the 2nd quarter of 2019 alone.
Even more frustrating are the so-called new regulations, which fail to address any underlying issues.
Consider the requirement that Facebook ask users to “opt-in” to facial recognition. Requiring opt-in has long lost any meaning because of the forced consent tactic. Facebook can simply put up a notice saying that you will not be served unless you consent to the following activities. This kind of notice is prevalent with mobile apps - to use these apps, you must agree to a list of demands.
Consider the requirement to encrypt passwords. This is standard IT best practice branded as regulatory success.
Consider the requirement to bar third-party apps that “fail to certify that they are in compliance with Facebook’s platform policies”. This is a reiteration of existing policy. The FTC does not stipulate any restriction on types of use. The issue is intractable since once the data moves to third-party servers, Facebook has no ability to monitor them.
As the following articles show, few are impressed by this settlement.
Business Insider: List of regulations
Vox: Facebook FTC settlement
Bloomberg: Privacy settlement won't hinder its ad business
Mashable: How FTC let Mark Zuckerberg off the hook
Techcrunch: 9 reasons the settlement is a joke
I agree with your larger point, but I disagree that $5 billion is a slap on the wrist. Facebook's net income was ~$20 billion in 2018, so that fine takes out about a quarter of their yearly profits. Net income is the relevant number here, since facebook has significant expenses.
Posted by: Nathaniel | 07/26/2019 at 01:17 PM