Put an­other zero on Face­book’s fine

The Tribune (SLO) - - Opinion - BY KARA SWISHER Kara Swisher is ed­i­tor at large for the tech­nol­ogy news web­site Re­code.

How can I de­scribe the fine of be­tween $3 bil­lion and $5 bil­lion that Face­book is likely to pay to the Fed­eral Trade Com­mis­sion – which will doubtlessly be touted as its largest ever – to set­tle the gov­ern­ment’s in­quiry into what the so­cial net­work­ing gi­ant called “our plat­form and user data prac­tices”?

How about: It’s a park­ing ticket. Not a speed­ing ticket. Not a DUI – or a DUI(P), data un­der the in­flu­ence of Putin. A park­ing ticket.

To be clear, $5 bil­lion is a lot of money. A lot of dough, clams, loot, let­tuce, simoleons. But with apolo­gies to “Jaws,” they’re go­ing to need a big­ger fine if they ac­tu­ally want to stop Face­book from vi­o­lat­ing its users’ pri­vacy.

Back in 2011, with I’m-sor­rys all around, Face­book signed a con­sent de­cree with the FTC around a dif­fer­ent set of data abuse issues. This new fine pre­sum­ably will cover all of the fresh I’m-sor­rys since then, for all the vi­o­la­tions that the com­pany has com­mit­ted over the last sev­eral years, in­clud­ing the mis­takes the com­pany made in not see­ing and then not quickly plug­ging the Cam­bridge An­a­lyt­ica data leak.

While there are some states wag­ing le­gal chal­lenges against Face­book, as well as other fed­eral agencies pok­ing around, the FTC is the big dog here. So for that money, Face­book will es­sen­tially get its sloppy slate wiped clean.

That’s why its stock rose sig­nif­i­cantly af­ter the news of the po­ten­tial fine, leap­ing up­ward af­ter an earn­ings re­port that showed strong in­creases in users and ad­ver­tis­ing rev­enue. From lows of $123 a share, Face­book’s stock is now flirt­ing with $200. In other words, the pri­vacy con­cerns raised loudly by politi­cians and the me­dia have not hurt Face­book’s growth.

With $23 bil­lion in cash on hand, Face­book will see a $5 bil­lion fine as sim­ply the cost of do­ing busi­ness. Need­less to say, this is not how fines are sup­posed to work. Scott Gal­loway, a mar­ket­ing pro­fes­sor at NYU, calls it the “al­ge­bra of de­ter­rence,” by which he means a price and a pun­ish­ment that makes cer­tain you will not do a bad thing again. Five bil­lion dol­lars is not that price. “Put an­other zero on it and then we can start talk­ing,” Gal­loway said.

As to the possibility that new reg­u­la­tions will fol­low the fine, Wall Street doesn’t seem wor­ried. Mark Zuckerberg re­as­sured in­vestors on that is­sue last week: “I un­der­stand that any reg­u­la­tion may hurt our busi­ness, but I think it is nec­es­sary.” That’s what I call an Oh-no-don’tt-hrow-me-in-the-bri­arpatch de­fense. He did some­thing sim­i­lar in an op-ed for The Wash­ing­ton Post in which he pretty much begged for reg­u­la­tion.

“I be­lieve we need a more ac­tive role for gov­ern­ments and reg­u­la­tors,” Zuckerberg wrote. “By up­dat­ing the rules for the in­ter­net, we can pre­serve what’s best about it – the free­dom for peo­ple to ex­press them­selves and for entrepreneurs to build new things – while also pro­tect­ing so­ci­ety from broader harms.”

I am not sure what ex­actly he means by “we,” since it has largely been Face­book mak­ing mis­takes that im­pact the rest of us, with the U.S. gov­ern­ment largely stand­ing by with­out a clue and try­ing to fig­ure out what is go­ing on.

Pro tip: A lot has been go­ing on. Here’s an­other free one – since the job of reg­u­la­tors is to pro­tect us, they have to stop the en­abling of pow­er­ful en­ti­ties and start forc­ing them to get in line – with fines, more in­ves­ti­ga­tions, smart laws, pro­grams to help small in­no­va­tive com­pa­nies to thrive, what­ever it takes.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.