Facebook agreed to pay the biggest fine in the FTC's history that is nothing compared with profits of social media itself
The social media that makes $15 billion in one quarter alone settled for a fine of $5 billion. The Federal Trade Commission and social platform reached the settlement over privacy violations. Although the agreement is still up for the Justice Department's review, it is unclear how this can end for the social platform. This fine is a big deal because it is the most significant fine in FTC history, so far the biggest one was $23 million levied against Google in 2012. However, Facebook makes $5 billion in a month or two so many people, officials and even lawyers call this fine a joke and a win for Facebook.
Even members of Congress opposed the settlement and called the fine a Christmas present for Facebook. Senator Ron Wyden states that FTC has failed and the decision is nothing but hollow. Senator Mark Warner noted about this financial penalty:
Given Facebook’s repeated privacy violations, it is clear that fundamental structural reforms are required. With the FTC either unable or unwilling to put in place reasonable guardrails to ensure that user privacy and data are protected, it’s time for Congress to act.
The biggest fine in history increased Facebook stock price
The government in the United States spent months investigating until the punishment for Facebook's long list of violation was set. However, this media exposure caused Facebook's stock price to go up. The fine of $5 billion is hugely too small for Facebook because the revenue that goes up to at least $22 billion per year. It seems that authorities punished Zuckerberg, but the stock market rewarded him making his net worth even bigger than before the investigation and settlement.
This fine is not changing anything for Facebook and may even be resultless when it comes to privacy-related violations. The punishment should be effective when there are negative consequences for such bad behaviour. Especially when Facebook already had issues with privacy and various scandals that didn't stop the company from violating users privacy.
As Scott Galloway from The New York University says, there is a need for at least one zero at the end of the fine to make any difference:
Put another zero on it and then we can start talking.
Is there an end to privacy-related violations?
Back in 2011, Facebook got charged by the FTC for deceiving consumers by failing to keep privacy promises. The social network service agreed with all the charges and still violated the law after that. Unfortunately, this fine is too small for Facebook, and this is not the solution that can keep the social platform from collecting information and sharing that data. Any conditions making a Facebook promise to protect user privacy can ensure that data-related issues are coming to an end.
As we mentioned, the settlement still is going through the Justice Department review, and everyone waits for the approval. In the meantime, many people have a lot to say for the FTC and Mark Zuckerberg himself. The government needs to hold Facebook accountable for this irresponsible behaviour and make the punishment big enough, so creators learn about real consequences.