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Facebook shrugs off the FTC

July 29 · Issue #357 · View online
The Interface
It was, in retrospect, perhaps not the best two weeks to go on vacation.
Each time I checked in with the news, there was some startling new collision between Facebook and democracy.
And that was only what happened last Wednesday!
(OK, the DOJ thing broke late the day before.)
In some ways, last week’s news represented a culmination of the threads that have unspooled over this newsletter’s not-quite-two years: A dawning awareness of internet platforms’ size and power. A reckoning over their excesses and unintended consequences. And belated but meaningful government action.
The question that ricocheted out of the various settlements and probes was, of course, just how meaningful that action actually was. The entity most invested in the idea that the settlement was meaningful was, of course, Facebook, which promoted it aggressively. The company talked of the “major changes to how it builds products and operates as a company,” and of the “fundamental shift in the way we approach our work.”
These changes and shifts were illustrated on an accompanying graphic, which touted efforts to “build privacy into every product” and generate various quarterly reports that must be signed by the CEO. An independent privacy oversight board will be spun up frown thoughtfully at Facebook’s future initiatives surrounding the creative acquisition of user data. The company distributed video clips of Mark Zuckerberg discussing these changes — rather gravely — with employees.
Facebook’s enthusiasm for the agreement was, frankly, suspicious. But it was understandable once you learned, thanks to Tony Romm at the Washington Post, that the company had essentially dictated the settlemen’s terms.
Facebook had a different understanding of its own errors: The tech giant internally believed at most it should be paying into the hundreds of millions of dollars, and the company felt it could easily prevail in court if it had to battle the FTC over how it calculates fines and what qualifies as a violation. In the end, Facebook still offered to pay more than it believed was required in a bid to assuage regulators and win other concessions from the feds.
Those concessions were numerous, and some observers — including the two Democratic FTC commissioners who voted against the settlement — found them outrageous. Facebook admitted no guilt; it agreed to make no changes to the way it collects user data; and it got the FTC to promise the agency would not hold the company or its executives liable for any as-yet undiscovered violations of its previous consent decree.
As Rebecca Slaughter pointed out in her dissent, which is very much worth reading, one problem with exempting Facebook executives from all other liability is that executives’ actions during this time were never fully investigated. And now there’s a $5 billion speeding ticket to ensure they never will be.
Members of Congress were quick to to criticize the settlement — just as they have been since details first emerged. But as Makena Kelly pointed out, Congress has powerful regulatory authority in this area:
In the long term, the only way for the FTC to quickly and effectively punish tech companies for harming consumers is if Congress were to step up and empower the agency with heightened authority in a new privacy law. The FTC already has a similar power provided to it through the Children’s Online Privacy Protection Act (COPPA) to fine companies when they’re found to have abused the privacy of children under 13, but it’s largely inapplicable to tech companies, and there’s no equivalent protection for adults. […]
For months, Chairman Simons has been pleading for a new law. But negotiations over the past few weeks have stalled, and it looks like Facebook was able to get off relatively easy, harming user privacy soon enough to skate by without harsher penalties imposed by Congress.
Matt Levine makes a great related point about why we got a settlement decree here rather than legislation:
I actually think there’s a deeper and stranger explanation here. Facebook did some things that a lot of people are upset about, some of which (certain sorts of data sharing) probably violated the laws or its earlier consent decrees, and others of which (certain sorts of data collection) didn’t. We want to stop it from doing all those things again, and the most straightforward way to do that is to pass a law saying which things you can’t do. But Americans are biased toward thinking of bad things as being already illegal, always illegal, illegal by definition and by nature and in themselves. If the thing that Facebook did was so bad, then it must have been illegal, so there is no need for a new law against it. At most we need a settlement with Facebook clarifying exactly which things it did were illegal and specifying that it won’t do them again. People are angry at Facebook, and that anger takes essentially punitive rather than legislative forms; we want to regulate Facebook’s future conduct as punishment for its past conduct, not as part of a general law. It is hard to imagine that a company could have done a bad thing without also breaking the law—which makes it hard to write new laws to prevent future bad things.
Amid all this, Facebook reported its quarterly earnings, which were sterling as usual. The stock price rose despite news that the FTC had started a new investigation of the company related to antitrust, presumably because recent history suggests to investors that such investigations are essentially toothless. The DOJ investigation may add firepower to the cause — but, as Matt Stoller argues persuasively here, it seems much more likely that the DOJ investigation will punish the president’s political enemies (“biased” Google and Jeff Bezos-run Amazon) rather than require Facebook to (say) spin off Facebook and Instagram.
All of which suggests that a foundational question of this newsletter — How will our government regulate tech platforms, and what will be the effects of those regulations? — may be cruising toward a deeply cynical conclusion. What if the United States ultimately does all its regulation of big platforms not in law, but in fines? What if, after years of investigation, all we have to show for it is theater — a tedious going through the motions?
What if, at the end of this strange era of “regulation,” we find that our biggest platforms aren’t much regulated at all?

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YouTube Said It Was Getting Serious About Hate Speech. Why Is It Still Full of Extremists?
Young Instagram Users Give Up Privacy in Search of Metrics
Facebook urges gay men to give blood, which can be a painful reminder they aren't allowed to
The Terrible Anxiety of Location Sharing Apps
(This new feature will highlight more podcasts, books, TV show episodes and movies that might be of interest to Interface readers. Thanks to Hunter Walk for the suggestion!)
Facebook Love Scams: Who’s Really Behind That Friend Request?
Facebook's Ex-Security Chief Details His 'Observatory' for Internet Abuse
The stubborn, nonsensical myth that Internet platforms must be ‘neutral’
For Tech, We’re the Gift That Keeps on Giving. But We Get Prime!
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And finally ...
Lil Nas X became Twitter’s CEO for a day and didn’t ban the Nazis
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