Whoa, Facebook

February 3, 2019

We know that Facebook has been facing criticism for playing fast and loose with user privacy. Now Fortune examines the issue in its piece, “Forcing Facebook to Behave: Why Consent Decrees Are Not Enough.” Writer Jeff John Roberts observes that the FTC may levy a significant fine on the company for violating a consent decree. (Facebook, of course, asserts it did no such thing.) This is a step in the right direction, perhaps, but will it do any good? We’re told:

“Facebook executives appear to have calculated long ago that a fine, even one for $1 billion, was the price of rapid growth and one that it could well afford. The calculation has paid off: Not only has Facebook turned user data into an advertising gold mine, it has also used it to squelch competitors and maintain a monopoly. Why should it have acted any differently? or companies to take privacy seriously, the U.S. requires a different legal regime. Right now, regulators must rely on the consent decree system, which gives companies a pass on their first major privacy violation, and then lets them quibble about subsequent violations. Vladeck points out consent decrees are a relatively new policy tool to oversee privacy, and the FTC is still navigating how to use them. This may be the case but the law that underlies them—known as Section 5, which forbids ‘unfair or deceptive acts’— still feels like a clumsy tool to police data regulation.”

On the other hand, Roberts notes, other countries deal more directly with the issue—with very specific privacy laws and significant consequences for those that break them. There is hope for common sense at home, too: a national privacy law has been proposed by an alliance of retail, finance, and tech companies. We shall see what becomes of it.

Cynthia Murrell, February 3, 2019


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