$5 billion buyout US government review of Facebook? not that simple

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According to the Wall Street Journal, Facebook is trying to resolve the privacy investigation conducted by the US Federal Trade Commission, and hopes to reach a settlement agreement. However, even if Facebook is ready to pay huge fines, it is difficult to divert the attention of government agencies. The Wall Street Journal quoted an unnamed source on Friday as saying that the Federal Trade Commission has voted to impose a fine of about $5 billion on Facebook’s breach of its previous commitment to protect user privacy. People familiar with the matter said that the voting rate was 3-2. Most Republicans support the adoption of this decision, and most Democrats believe that the settlement agreement is not enough to explain the problem.

In fact, the political and regulatory storm facing Facebook has just begun. Next week, the social media giant will arrange for executives to attend two hearings on Capitol Hill: one of the hearings will measure whether to take action to curb the market influence of large technology giants, and another hearing will focus on Facebook and Libra, the cryptocurrency introduced by the company's partner program.

Last week, President Trump criticized social media companies at an event held at the White House and said that a regulatory proposal might be introduced. Ireland's privacy regulator is conducting 10 investigations related to Facebook's collection and processing of user data.

Legislators of the Republican and Democratic parties in the United States said they felt that the $5 billion penalty was not big enough. The reaction of the legislators to the settlement agreement also shows that government agencies do not stop on Facebook and other large technology companies.

"I don't want to judge the $5 billion settlement, but Facebook's revenue is several times this quarter." Senator Mark Warner mentioned Facebook's revenue in an interview this year. In the first quarter, the company's revenue was $15.08 billion.

Warner said Facebook and other large technology companies are relying on structural adjustments to improve user data, disseminate misinformation, and other issues.

"The FTC fine may not change this behavior," he said.

In recent weeks, Republican Senators Josh Hawley and Marsha Blackburn have raised concerns about Facebook's privacy policy and urged the Federal Trade Commission to take steps to protect user data security.

Legislators also asked Congress to consider setting up a new privacy policy, but it is unlikely that relevant legislative proposals will be passed in the short term.

The settlement agreement is expected to make other requests to Facebook, but the specific terms of the agreement are still not known. The official disclosure of the agreement is estimated to be a few weeks later.

Both Facebook and the Federal Trade Commission declined to comment.

Maureen Ohlhausen, a former FTC committee member, said the critique of the settlement agreement revealed more political fronts against Facebook.

Democrats opposed to the settlement agreement said they would take more stringent measures even if the FTC won the lawsuit with uncertainty.

Earlier this year, Facebook issued a series of statements to avoid scrutiny. Mark Zuckerberg previously said that Facebook is focused on providing tools for private communication and supporting privacy-related legislation on a global scale.

Privately, Facebook employees said the allegations that led to the FTC investigation made Facebook innocent of privacy, error messages, and advertising issues across the technology industry.

In conversations with employees and outsiders, Facebook executives believe that media coverage of user data disclosure scandals – coupled with fears of foreigners intervening in elections – masks the company's efforts to protect user data.

Last year, a test application stole personal data from tens of millions of Facebook users and their friends and shared the data with political consulting firm Cambridge Analytica. After the incident was exposed, the FTC began investigating Facebook. This app violates Facebook's policies, but it shows that Facebook is negligent in managing these applications.

Cambridge Analytica uses personal data to influence voters. In 2016, the company was involved in many Republican activities, including President Trump. The company has closed its doors as the outside world has questioned the company's strategy and the way it handles data.

After the demise of Cambridge Analytica, Facebook was caught in some turmoil, including hacking incidents of millions of accounts leaked last year.

The company has formed a privacy team that will check all important new products before they go live. In accordance with the requirements of the 2011 FTC, Facebook agreed to accept PwC's privacy audit. The audit did not find any problems with Facebook, and in 2017 PwC believed that Facebook's internal privacy control was very efficient, but this conclusion was ignored by the company's critics. The $5 billion fine is expected to involve Facebook’s violation of the 2011 agreement.

"$5 billion is the cost of doing business." Marc Rotenberg, director of the Electronic Privacy Information Center, said he has been supporting a more rigorous regulatory review of Facebook's privacy practices.