Record Facebook fine won’t end scrutiny of the company

Facebook survived its latest brush with U.S. privacy regulators, at cost of a record $5 billion fine and or restrictions imposed by Federal Tre Commission. But it’s far from home free.

While company looks set to prosper in wake of FTC case, it faces a series of or investigations into its privacy practices in Europe and across U.S. Concerns over limits of just-settled probe could fuel efforts to craft tougher privacy laws at state and federal level.

social network is also gearing up to fight investigations into its allegedly anticompetitive behavior, such as Facebook’s habit of buying would-be rivals like Instagram and blatantly duplicating features introduced by competing services.

Department of Justice opened a bro antitrust probe focused on techlogy companies on July 23. On July 24 Facebook disclosed that it also faces a fresh FTC investigation into alleged anticompetitive behavior. It didn’t provide details of scope or focus of probe. Representatives of FTC confirmed antitrust investigation but offered ditional information.

outcome of se investigations may well determine wher world’s governments can actually rein in a transnational corporation that directly touches almost a third of world’s population.

(Federal Tre Commission FTC Chairman Joe Simons )

“re is a lot more to come on regulatory front for Facebook,” said Debra Aho Williamson, analyst with research firm eMarketer. To pre-empt this and do things on its own terms, Williamson said company is “going to do whatever it can” to change its business model and change way it gars data.

FTC penalties, viewed by some as a stunning rebuke to social network, might well crush a smaller firm. But y seem unlikely to faze Facebook — fine, for instance, amounts to less than 10% of Facebook’s annual revenue and t even a quarter of its annual profits. Some critics charge that FTC didn’t deliver much more than a slap on wrist.

“Facebook makes that much money in a couple of weeks,” said Siva Vaidhyanathan, a University of Virginia professor and author of “Antisocial Media: How Facebook Disconnects Us and Undermines Democracy.” company is free to “get back to business as usual,” he said.

Wall Street seems to agree. Facebook’s stock price climbed higher Wednesday after deal was anunced. company is worth much more than it was when its Cambridge Analytica privacy scandal erupted back in March 2018. On July 24, Facebook’s market value hovered around $575 billion — roughly $40 billion above where it stood before news of Cambridge abuses broke.

Ashkan Soltani, a former FTC chief techlogist, said settlement was effectively “a get-out-of-jail free card for Facebook.” deal absolves Facebook of any consumer-protection claims prior to June 12 of this year, a highly unusual step that effectively wipes slate clean where kwn historical privacy violations are concerned.

Soltani and or critics also te that FTC settlement barely touches Facebook’s underlying business practices, which rely on collection and analysis of its users’ activities and personal details to fuel company’s lucrative vertising machine. In its formal legal complaint, FTC used word “deceptive” 14 times to describe Facebook’s practices and policies.

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“re is a lot more to come on regulatory front for Facebook,” said Debra Aho Williamson, analyst with research firm eMarketer. To pre-empt this and do things on its own terms, Williamson said company is “going to do whatever it can” to change its business model and way it gars data.

Facebook has alrey signaled that this is coming. Earlier this year, CEO Mark Zuckerberg unveiled a new “privacy focused” vision for company that centers on private messaging and encrypted communications. details are scant. But it shows that company is thinking years into future even as regulators are investigating and punishing it for years-past violations.

As part of FTC’s settlement with Facebook, Zuckerberg will have to personally certify his company’s compliance with its privacy programs. FTC said that false certifications could expose him to civil or criminal penalties. But settlement did t hold Zuckerberg personally liable for past violations, as some h expected.

In a Facebook post on July 24, Zuckerberg vowed to “make some major structural changes to how we build products and run this company” as a result of settlement. “We have a responsibility to protect people’s privacy. We alrey work hard to live up to this responsibility, but w we’re going to set a completely new standard for our industry.”

In a similar tone, FTC Chairman Joe Simons, speaking at a news conference, said settlement is “unprecedented in history of FTC” and is designed “to change Facebook’s entire privacy culture to decrease likelihood of continued violations.”

Simons, however, ackwledged that FTC’s powers were limited. It could t, for instance, fine Facebook $10 billion or target Zuckerberg personally for investigation. “We cant impose such things by our own fiat,” he said at a news conference following release of settlement.

Three Republican commissioners voted for fine while two Democrats opposed it. ir wish list included specific punishment for Zuckerberg, strict limits on what data Facebook can collect and possibly even breaking off subsidiaries such as WhatsApp and Instagram.

neless, regulators touted agreement as imposing a “sea change” on how Facebook handles privacy of people’s data. Simons called it “a belt-and-suspenders approach to compliance” — with five overlapping “channels” both inside and outside Facebook.

For instance, a new, independent committee of Facebook’s board that focus on privacy alone. As agreed, Zuckerberg and new designated compliance officers must each, independently, certify to FTC that Facebook is in compliance. Falsely certifying would subject Zuckerberg and officers to personal liability, including civil and criminal penalties.

Commissioner ah Phillips compared that to regime imposed on corporate CEOs following wave of accounting scandals in 2001-2002 that began with Enron. CEOs w are required by law to personally vouch for accuracy of ir financial reports.

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