A 2011 consent decree with the FTC might be an existential threat to Facebook, which doesn’t give a damn about protecting personal data but cares a lot about money.
The Tech Curmudgeon has been thinking a lot about Facebook lately – whether to leave it, mostly. It’s been years since the Tech Curmudgeon has had the app installed on any phone, because Zuck and Friends have no reason to need the Tech Curmudgeon’s location at all times, or his entire contacts list, or his email address book. And it turns out that the Tech Curmudgeon was right to be concerned, given how much data Facebook was gathering even if you opened the app once.
Fuck you, Zuck.
Still, the Tech Curmudgeon thinks that pissed off customers is actually the least of Facebook’s problems at the moment. See, according to an interview he came across, Facebook entered into a “consent decree” with the Federal Trade Commission back in 2011 regarding customers’ privacy. The Tech Curmudgeon is no expert on such things, but it sure sounds like the FTC gave Facebook a slap on the wrist, but promised to come down on the company like a metric shit-ton of bricks if they didn’t clean up their act. Specifically, they said that they’d charge Facebook $40,000 per user whose personal information was not properly controlled.
$40,000 doesn’t sound like a ton, and it’s a drop in the ocean if Facebook screws up a single user’s data. But Facebook screwed up 89 million people’s data. Some quick multiplication and we find that $40,000 per customer multiplied by 89 million users is… hold on, let me double check that number… yep, it’s right.
$3.56 trillion. Three and a half trillion dollars. That’s trillion, with a “T.” That’s not a drop in the ocean, that is the fucking ocean.
As of market close today, Facebook had a market capitalization of just shy of $478 billion. Let’s look at that potential fine again – yep, it’s greater than the total market value of Facebook. More than seven times more, in fact. Can you say “Federal takeover?” I knew you could.
What does this mean for Facebook?
It means that the FTC owns Facebook. Not literally, but a federal takeover isn’t necessarily outside the realm of possibility at this point. It means that the only thing that the Feds have to do in order to force Facebook to do, oh, just about anything the Feds want is say that they’re going to strictly enforce that consent decree. At that point Zuck and every other executive is out of a job and homeless. At that point the Feds can break Facebook up, or liquidate its assets, or literally do whatever the fuck they want to it, because that’s the only way that Facebook could cover the fines.
Facebook claims that they don’t sell the Tech Curmudgeon’s data, or your data, or anyone else’s data. While the Tech Curmudgeon don’t believe them for a femtosecond (or trust them farther than he could fling their headquarters with a trebuchet), even if they don’t sell his data, the fact is that Facebook has no business without personal data. That’s literally their business model – collecting and monetizing personal data. Everything else they do, every service they offer is just a means to that end.
Facebook doesn’t give a shit about protecting personal data. They only care about money. Well, if that’s the only language that Facebook understands, then it’s a good thing that the FTC knows how to speak that language. And with that kind of penalty looming over their heads, there’s a good chance that even Facebook just might listen.
Categories: Business/Finance, Freedom/Privacy, Internet/Telecom/Social Media
Sure, but would the FTC have the gonads to actually do that? The feds don’t have an overwhelmingly strong record in protecting consumer interests. That’s what all the lobbying is about, right?
The government serves at the pleasure of the oligarchs. They might have the technical authority to leap tall buildings in a single bound, but that’s probably not how to bet.
FYI, FB is the #2 lobbying company in the tech sector.