Reactions to FTC's $5 Billion Settlement with Facebook for Privacy Violations

The Federal Trade Commission released details of its settlement with Facebook over violations to a 2012 consent decree. Under the settlement, Facebook has agreed to pay $5 billion, create a privacy committee on Facebook’s board, and conduct a privacy review. The FTC alleges that Facebook repeatedly violated the 2012 order, and that the improper data collection and misuse by Cambridge Analytica was just a part of a larger problem. Some reactions:

House Commerce Committee Chairman Frank Pallone (D-NJ):  “While $5 billion is a record fine for the FTC, monetary damages are not enough. Facebook has repeatedly demonstrated that it prioritizes profit over people. Tough oversight is needed to prevent the abuse of consumer information by Facebook and other companies. Comprehensive privacy legislation is necessary to strengthen the FTC’s authorities and give it more enforcement tools and resources so that violating consumers’ privacy and breaking public trust isn’t just the cost of doing business.”

Senate Commerce Committee Chairman Roger Wicker (R-MS): “The settlement between the FTC and Facebook further stresses the need for a strong federal data privacy law. The details of Facebook’s conduct that were illuminated by the FTC’s investigation are troubling. This investigation and settlement, including a fine significantly larger than has ever been assessed by a privacy enforcer anywhere in the world, are examples of the great work the FTC can do. However, without a robust, comprehensive federal privacy law covering data collectors and consumers, bad actors will be able to continue to abuse data in the online marketplace.

Charlotte Slaiman, Competition Policy Counsel at Public Knowledge: "Today we see the result of over a year of investigation and negotiation by the FTC. It is frustrating that the FTC was not able to achieve more significant changes to Facebook’s behavior going forward. Facebook users cannot count on being protected as a result of this settlement. Under this settlement, Facebook does not have to meaningfully change how it collects and uses your data. Facebook retains complete control over when to share your data outside of Facebook, as long as the company complies with the privacy policy that it gets to write. The settlement also protects Facebook from further enforcement on other potential violations that we may not even know exist. The settlement does not impose any pro-competition terms, such as interoperability requirements or limiting data-sharing between Facebook, Instagram, and Whatsapp to the same terms used with third-parties so that competitors can compete fairly. While the settlement does require additional auditing processes and reporting requirements as well as a very large fine, the settlement is weak given the repeated violations and the severity of the harm. We must pass new and more effective privacy laws, as well as broader platform regulation aimed at improving competition in the sector so that consumers can more easily switch to an alternative product if they are not happy.”

Eric Null, senior counsel at New America’s Open Technology Institute: “With the Facebook settlement, the FTC appears to be stepping up its privacy enforcement. But consumers should be skeptical that the settlement will lead to any effective change in online privacy protections or Facebook’s business practices—the company was rewarded on the stock market for the settlement, the settlement imposed no meaningful restrictions on Facebook’s data collection and sharing practices, and structural changes require a tenacious overseer to ensure compliance or they may lead to nothing. Today’s settlement exemplifies the need for strong privacy legislation, which could better protect consumers everywhere by making many practices, including those Facebook engaged in, explicitly unlawful. The FTC only achieved as much as it did because it had a prior consent decree in place. Without comprehensive privacy legislation, consumers will likely end up with more of the same.”

Free Press Policy Counsel Gaurav Laroia: “While the $5-billion fine is one of the largest in the FTC’s history, it still falls far too short. As Commissioners Chopra and Slaughter explained in their dissents, the FTC’s $5-billion fine is unlikely to change the company’s behavior. It represents just one month’s worth of earnings for Facebook and is a tiny fraction of the company’s growth in revenue since it entered into a consent decree with the agency in 2012 for violating its users’ privacy. Far more serious consequences are needed to curb the tech industry’s behavior and its amoral pursuit of growth at our expense. This settlement doesn’t change that underlying dynamic. The FTC order places no meaningful limits on Facebook’s collection of users’ personal information. The settlement also fails to address the business model that incentivizes the invasive and manipulative practices the company was fined for. The Cambridge Analytica scandal rightfully motivated the FTC’s to reopen its investigation into Facebook. The company’s lax privacy controls enabled the manipulation of voters in the 2016 election and damaged our democracy. Without corrective action, the business of behavioral advertising is bound to harm our social, political and private lives again and again. It’s now up to Congress to pass legislation to protect our privacy, our democracy and our civil rights.”

Marta Tellado, President and CEO of Consumer Reports: “As expected, the size of the settlement is historic, but these attempts to hold Facebook accountable are not enough to make a real difference. With a weak and under-resourced FTC, and a glaring need for far more comprehensive privacy laws, Congress must raise the standards for consumers and hold Big Tech accountable. Lawmakers have a responsibility to pass laws that offer real protections, giving consumers control of their data and the FTC the power it needs to rein in Big Tech. The details of this settlement make it brutally clear that this isn’t just about Facebook’s privacy policies.  Facebook made a concerted effort to control and manipulate consumer choices, by misrepresenting how they do business, and how they treat their users.”

Open Markets Institute: "The Open Markets Institute denounces the Federal Trade Commission’s (FTC) official $5 billion settlement with Facebook. Even as the FTC’s complaint alleges that Facebook committed major privacy violations, the FTC still failed to question Mark Zuckerberg and has not required an admission of guilt by the corporation, protecting Facebook from legal liability.