We have just received the reports that US’ FTC has announced details of its agreement with Facebook. This is regarding the various privacy violations done by Facebook in recent times for which the company has been fined too. While we do know that FTC’ $5 Billion fine for Facebook is its highest, it is nothing for Facebook in reality. As TechCrunch’s Devin Coldeway says, the FTC settlement for Facebook ‘is a joke’.
Now, there are plenty of reasons to believe why everyone is calling this settlement a joke and why it really is. First of all, you have to understand that Facebook makes more than $50 Billion just in revenue. Therefore, the $5 Billion for serious privacy violations does not harm Facebook one bit. Also, it does not set a good precedent as to how privacy violation settlements should be carried out. Because this would send every company a message that they can get away easily with this.
Instead, FTC should have fined Facebook with twice or thrice its annual revenue so that Facebook would consider following the privacy laws. Apart from that, FTC has also not grilled any of Facebook’s executives or Mark Zuckerberg, its CEO. Commissioner Rebecca Kelly Slaughter, after the FTC fine, said that “The fact that Facebook’s stock value increased with the disclosure of a potential $5 billion penalty may suggest that the market believes that a penalty at this level makes a violation profitable,”
This is a very serious problem which FTC should look into when it fines some other company for privacy violations. Because if a company gets a $5 Billion fine for privacy violations of $5 Billion or more, it is not exactly a penalty. Also, the investigation by FTC feels rushed and Facebook was not even asked how much money it made from these violations or how much money it made.