Facebook won lower penalty in privacy scandal by threatening court battle: WaPo
July 23, 2019 (LifeSiteNews) — Lawmakers of both parties have condemned the Federal Trade Commission (FTC) for a settlement with Facebook they deemed too soft a penalty for the social media giant’s privacy scandals. Now a new report is shedding light on what the commission originally wanted and why it backed down.
Last week, the FTC voted to approve a $5-billion settlement with Facebook for a string of scandals regarding its handling of user data. In the most notorious, Cambridge Analytica whistleblower Christopher Wylie testified that the analytics company was able to acquire the personal data of more than 50 million Facebook users without their consent and that Facebook apps on users’ devices had the capability to “pull audio” from users’ environments to refine their ad targeting.
Before that, Obama for America media director Carol Davidsen admitted that Facebook allowed Barack Obama’s campaign to take users’ personal information because the company supported the former president.
“Even a fine in the billions is simply a write-down for the company, and large penalties have done little to deter large tech firms,” Sens. Josh Hawley (R-Mo.) and Dick Blumenthal (D-Conn.) warned the commission in May. “If the FTC is seen as traffic police handing out speeding tickets to companies profiting off breaking the law, then Facebook and other will continue to push the boundaries.”
On Monday, the Washington Post published a follow-up revealing that the FTC initially wanted to not only fine Facebook in the “tens of billions,” but to impose direct penalties on founder and CEO Mark Zuckerberg — namely, an order that would hold him personally liable for future privacy transgressions.
The FTC ultimately agreed to a softer settlement, however, essentially because Facebook called its bluff and expressed a willingness to fight the commission in court, with its attorneys backed by drastically more money than the commission’s budget.
“The tech giant internally believed at most it should be paying into the hundreds of millions of dollars, and the company felt it could easily prevail in court if it had to battle the FTC over how it calculates fines and what qualifies as a violation,” Post tech reporter Tony Romm writes. “In the end, Facebook still offered to pay more than it believed was required in a bid to assuage regulators and win other concessions from the feds.”
Facebook threatened to go to court over any order placed on Zuckerberg himself, as well as any mention of Zuckerberg’s past public statements on user privacy. It also opposed new restrictions on how the company collects user data.
Romm notes that while taking the matter to federal court would have been risky for Facebook, the FTC saw the prospect as at least as risky.
“The agency, armed with a relatively small $306 million budget in 2018 that supported roughly 1,100 employees, had to confront the possibility that it might be outmatched in such litigation,” he writes. “A loss also could have immensely damaged the agency, perhaps setting a legal standard that curtailed the commission’s authority to police other tech giants for their privacy and security practices.”
Concerns over Facebook’s accumulation and handling of user data intensify conservative fears over the social network’s political biases. In March, a Project Veritas investigation detailed how Facebook “deboosts” traffic to several mainstream conservative sites, and Facebook CEO Mark Zuckerberg recently admitted that the company blocked foreign pro-life ads ahead of Ireland’s abortion referendum, despite no Irish laws or state requests compelling the company to do so.
Earlier this month, President Donald Trump announced that he was “directing my Administration to explore all regulatory and legislative solutions to tech censorship, but the Post’s latest report suggests that these controversies won’t be settled without new legislation.
Federal Communications Commission (FCC) chairman Ajit Pai told Congress last month that he considers “unregulated Silicon Valley tech giants” today’s “greatest threat to a free and open internet.” Sen. Hawley has proposed legislation that would require social media platforms to certify their political neutrality with the FCC if they want to keep their congressionally granted immunity from legal liability for what they allow users to post.