; Date: Fri Jul 12 2019
Today via the Wall Street Journal we learn that the Federal Trade Commission has approved a $5 billion fine against Facebook over privacy violations. But because Facebook makes so much money every year, and has billions of dollars in the bank, the company may just see it as a slap on the wrist and keep on keeping on.
Reportedly the action was taken in the wake over allegations about Cambridge-Analytica during the 2016 elections. That company inappropriately gathered personal information about voters, and used that information to target them with customized political messages. It constituted foreign influence in the 2016 election cycle, and was done under the direction of Russian intelligence services.
However that specific story is just the tip of the ice-berg in terms of Facebook's egregious privacy violations.
There has been allegation after allegation, and in fact Facebook was under an earlier consent decree which Facebook had violated.
The best thing for us individuals to remember is that - whenever the service is free, we are the product.
Facebook's actual customers are not us - Facebooks member base - but instead the advertisers who flock to Facebook because it offers a highly targeted marketing and advertising platform. A platform from which Facebook is earning a huge amount of money.
Facebook claims they are not in the business of selling our information. That is a lie.
Facebook's business model is to gather an enormous amount of information about us all, then package that information as an advertising service. That advertising service allows advertisers to target with amazingly precise demographics.
Every time a Facebook user likes a page, or subscribes to a group, or comments on a posting, or makes a posting, or anything else, forms more pieces of data from which Facebook derives what that person is interested in. From that pool of interest data, Facebook helps advertisers target their messages.
What Cambridge-Analytica was doing, however, is to gather the same sort of data (for "research"), then hand that data off to another analyst that had connections to Russian intelligence services. Both Cambridge-Analytica and that researcher had huge expertise in analyzing personal preference data, and using that data to target political messages.
The settlement amount
Reportedly the FTC wanted to make this settlement the biggest ever.
Reportedly Facebook set aside $3 billion in cash to handle the settlement.
Facebook is earning over $15 billion a year in profit, on $55 billion a year in revenue.
Will Facebook notice a $5 billion payment of which they've already set aside $3 billion?
In May, Sens. Richard Blumenthal (D-Conn.) and Josh Hawley (R-Mo.) wrote to the FTC saying that the sum Facebook expected to pay would be a "bargain" for the nearly $600 billion company and that the agency should consider holding individual executives responsible.
"Even a fine in the billions is simply a write-down for the company, and large penalties have done little to deter large tech firms," the bipartisan duo wrote. "If the FTC is seen as traffic police handing out speeding tickets companies profiting off breaking the law, then Facebook and other will continue to push the boundaries." -- The Hill