Senators From Both Sides Say FTC-Facebook Deal Appears Inadequate
The FTC again met criticism last week from Senate Democrats and Republicans after reports of an estimated $5 billion privacy settlement with Facebook. A former commissioner defended the agency's reported 3-2 decision, saying a more-stringent penalty was never guaranteed in court.
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A privacy violator worth tens of billions of dollars deserves a stiffer fine, given its history of data privacy offenses, Sen. Marsha Blackburn, R-Tenn., told us: “It should’ve been a more robust penalty.” The punishment doesn’t match the magnitude of the violation, Sen. Ed Markey, D-Mass., agreed, calling it the equivalent of a “privacy parking ticket.” Sen. Josh Hawley, R-Mo., also rejected the reported settlement, noting the company was claiming it's an appropriate amount (see 1904240064). Hawley will be more disappointed if additional data privacy restrictions aren’t included, he said. The agency and company declined to comment Friday.
The reported 3-2 vote isn’t a good sign for the effectiveness of any additional remedies in the agreement, said Sen. Richard Blumenthal, D-Conn. It shows these particular commissioners see more need for structural changes, he added: A “purely financial settlement is simply inadequate.” Authorities should consider breaking up the platform, he said.
“The problem is not having the courage to stand up to a giant corporation like Facebook,” said Sen. Elizabeth Warren, D-Mass. “We need to break up these big tech companies, so that we have real competition in the area and so that we demand higher privacy standards from them.”
“We need stronger laws, and I’ll have to see to what degree the FTC felt like they didn’t have the ability to do something,” said Senate Commerce Committee ranking member Maria Cantwell, D-Wash. She and Chairman Roger Wicker, R-Miss., opted for bilateral privacy legislation negotiations, leaving the committee’s working group in flux (see 1907090049). Cantwell wants to bring other colleagues into the fold but didn’t say how. Wicker told us he met with Cantwell last week, and staff discussions followed. “There’s progress,” he said, declining to say whether they’re nearing a proposal.
Sen. John Kennedy, R-La., said $5 billion “is a lot of money. I’m not suggesting that Facebook didn’t deserve it.” The amount supports the company’s apparent belief that “violating the law and then paying a fine is the cost of doing business,” said Sen. Brian Schatz, D-Hawaii.
No sum “excuses the mistake” of not holding CEO Mark Zuckerberg personally liable, Sen. Ron Wyden, D-Ore., said. That the company’s stock value jumped immediately after news of the settlement “says it all,” he added. Shares gained 2.6 percent July 12, the day the settlement was reported.
Some pushback to Facebook’s cryptocurrency plans (see 1907170058) is due to the company’s reputation, Senate Banking Committee Chairman Mike Crapo, R-Idaho, acknowledged in an interview. Others take issue with the potential for an underregulated currency. “I’m saying it’s both,” Crapo said, noting he shared concerns about the company’s history. Consumers will have access to digital currency, regardless of Facebook’s plans, he said: The issue needs to be addressed more broadly.