Earlier this month, news broke that Facebook had reached an agreement with the FTC to pay $5 billion for its history of privacy and data breaches. It’s the biggest fine the agency has fired at a tech company (by far), but everyone from critics to lawmakers have been questioning its effect on the company’s bottom line and its ability to deter others. Even more so after Facebook’s value shot up as a result of the news, negating the effect of the punitive action and even making it richer as a result.
In a parallel universe where the FTC has a spine, things might have turned out differently. The Washington Post reports that the independent government agency had originally planned to fine Facebook “tens of billions of dollars” and impose reforms that would hold Zuckerberg personally accountable a potentially historic action that would have had serious consequences for Facebook and forced significant changes at the company. Instead, the FTC reportedly caved under pressure from Facebook’s larger and better capitalized legal team.
While the FTC had believed Facebook’s privacy violations warranted a fine in the tens of billions, the tech giant “had a different understanding of its own errors,” according to the Post. Facebook lawyers believed the company should pay a fine in the hundreds of millions range “at most.” Ultimately Facebook oh-so-graciously agreed to “assuage regulators” by paying $5 billion—but won other critical concessions in return. One such concession might be the FTC losing out on its desire to hold Zuckerberg more liable for Facebook’s missteps by putting him personally under an FTC order—a move that Facebook’s legal team “steadfastly opposed.” (The final settlement is expected to include reforms that subject Facebook to higher federal scrutiny, though exact terms of the deal have yet to be officially announced.) The FTC, it seems, didn’t have the manpower or resources to put up much of a fight. Facebook made it clear that they would take the matter to court if needed—a legal battle that might have taken years and cost tens of millions of dollars.
The Washington Post says Facebook’s team of lawyers vehemently opposed the FTC’s proposal to place Zuckerberg under orders, going to great lengths to protect him from being singled out by the agency, who wanted to call him out for his public statements on privacy and how Facebook would deliver that to its users.
The company’s legal team was prepared to go to court to protect the CEO, and the Commission feared it lacked the funding to take on the social media giant, so it settled for less as a compromise. In the meantime, Facebook remains a social monopoly of sorts and is fighting for a chance to launch Libra, its very own digital currency.
