In any other week, Big Tech might have faced harsh public scrutiny. But this week, with former special counsel Robert Mueller testifying before Congress, any bad news that should have hampered tech companies like Facebook was surreptitiously swept under the rug.
On Wednesday, the Federal Trade Commission formally announced its long-anticipated $5 billion settlement with Facebook over privacy violations, stemming from a 2012 consent order with the FTC. The commission determined that Facebook violated the order by failing to protect user data from third parties, most notably in the case of Cambridge Analytica, which resulted in tens of millions of Americans’ personal data being exposed. The company then used the information to craft personalized, pro-Trump political ads.
In addition to the fine — which, the FTC took pains to mention, is more than 20 times the largest levy ever negotiated by the European Union’s much-touted General Data Protection Regulation — Facebook has also been compelled to make sweeping changes to its privacy policy. That includes conducting a privacy review of every new product or service it develops and obtaining purpose and use certifications from apps and third-party developers.
The FTC also ordered the company to completely alter its corporate structure to establish several different information flows about privacy decisions “so that if there is a breakdown in one or more channels, another channel can identify the problem and fix it.”
In a news release on Wednesday, Facebook, not surprisingly, put the best face on matters, launching into a detailed explanation as to how it planned to comply with the FTC order.
“Privacy is more central than ever for our vision for the future and we’re going to change the way we operate across the whole company — from the top down and from the ground up,” CEO Mark Zuckerberg said at an all-staff meeting where he announced the change. “We’re going to change our products and if we don’t, we’re going to be held accountable for it.”
Conveniently, Facebook’s FTC announcement came the same day as the Mueller hearings on Capitol Hill, which meant that the vast majority of media attention was focused on that, and not the systemic issues plaguing Facebook which were part of the reason Russian interference in the 2016 election was so successful in the first place.
It’s possible that the timing of both Facebook’s announcement and the Mueller hearings were simply coincidence. But Facebook has, in the past, gone to great lengths to keep bad news quiet.
In September 2017 when Facebook announced that it had discovered Russian-linked ads on its website, it stressed that “the amount of problematic content we’ve found remains relatively small.” Two months later, it announced that 126 million people had in fact been exposed to the misinformation.
Notably, Facebook’s stock surged on July 12 — immediately after the FTC approved the $5 billion settlement.
Two Democratic trade commissioners dissented against the FTC’s decision to fine Facebook this week. Rebecca Kelly Slaughter and Rohit Chopra argued that the commission buried multiple lines of inquiry in favor of a quick and press-friendly solution, and that the fine did not go far enough.
“The settlement imposes no meaningful changes to the company’s structure or financial incentives, which led to these violations,” Chopra wrote in a letter. “Nor does it include any restrictions on the company’s mass surveillance or advertising tactics.”
“I do not share my colleagues’ confidence that the order or the monetary penalty will effectively deter Facebook from engaging in future law violations,” Slaughter wrote in her dissent. “The FTC can and should demand settlement terms that will send a clear message to wrongdoers and the public alike that violating a Commission order is to be avoided at all costs.”
Slaughter and Chopra’s reservations make more sense when you look through the complaint and catalog the sheer number of issues of which the FTC accused Facebook.
For example: In 2012, the platform allegedly removed an FTC-mandated disclosure (which was already hidden in small print on its “Privacy Settings” page) saying that information shared with a user’s Facebook friends could also be mined by apps for data. And in 2014, Facebook allegedly failed to make it clear to users that the platform could still share data with third-party developers about users’ Facebook friends.
When Facebook announced it would stop allowing this in April 2014, it allegedly took the company until June 2018 to fully change its policy.
It’s perhaps not surprising that, given the amount of data Facebook has access to and its laxity in securing it, Facebook is now facing another new antitrust probe from the FTC, part of a wider investigation by the Justice Department into whether Facebook’s monopolistic business practices hurt consumers and reduce competition.