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Facebook Expects to Be Fined Up to $5B by FTC Over Privacy Issues

562 points by Dangeranger 7y ago

deleted 7y ago
[deleted]
busymom0 7y ago
This is pocket change for them. Reminds me of how they fine oil companies $50,000 and another $450,000 for violations. When they are making billions off of violating user privacy and will continue to keep using that user data for future business, this fine is nothing to them. It's like I manipulatively steal $10 from a million people and only lose a few bucks. They still profited.
- lucasmullens 7y ago
  $5,000,000,000 reminds you of $50,000? A fine of 1% of Facebook's value seems a bit more than pocket change.
  - lordnacho 7y ago
    What? FB's value naturally changes by more that 1% on quite a lot of days each year, without this fine. Put it another way: if you took all of the daily market cap changes of FB's stock, but added -1% to one of them, could you pick out which one it was?
    - lucasmullens 7y ago
      How does that make it not matter? My savings in the stock market do the same thing, but if I got a fine/bill that was 1% of my net worth, it would still be a huge deal.
      - lordnacho 7y ago
        If your net worth changes often randomly covered the fine amount, it is very different from if you were say a pensioner on a fixed income. Having had days where NW changed by entire year's salaries, I can say it makes a huge difference to how you see it.
  - busymom0 7y ago
    It is 5 billion but that's nothing considering they make 15 billion and more in future using the unethical practices. It's like me stealing your car and only being fined for the wheel and I still get to keep the car.
  - ionised 7y ago
    1% of anything's value is pocket change. It's not about how much money it is to you or me, but how much money it is to Facebook. And it's not a lot.
product50 7y ago
Before this thread becomes a Facebook bashing session, please keep in mind that Equifax leaked all your SSN data along with names and addresses and got away with no fines.
- crushcrashcrush 7y ago
  Leaking this data wasn't an intrinsic part of their business model.
  - paxy 7y ago
    It is, even more so than Facebook. Buying and selling your personal financial data is Equifax's entire business.
- jokoon 7y ago
  Whataboutism...
  - lordnacho 7y ago
    Similar punishment for similar transgressions is how the law is supposed to work.
    - munk-a 7y ago
      Assuming those punishments are fair and just - the punishments companies have been getting lately for privacy violations have been relatively consistent - nobody is actually being punished.
    - CharlesColeman 7y ago
      > Similar punishment for similar transgressions is how the law is supposed to work. Facebook and Equifax did not commit similar transgressions, and to say to is misleading.
      - lordnacho 7y ago
TACIXAT 7y ago
This would be awesome if it applied to security breaches as well. Not sure how you would fine OPM, but there are a ton of consumer companies that have leaked data like a sieve.
- zavi 7y ago
  You cannot fine companies for being technically incompetent.
  - spaceheretostay 7y ago
    Surely you can - that could amount to criminal negligence which is definitely a crime.
    - gtirloni 7y ago
      Yes, you can and should. But how do you define negligence in IT? We don't have the same codified norms as civil engineering so it'd be very subjective.
      - TACIXAT 7y ago
        I feel the best test was "did you get breached? what data was taken?", if the answers are yes and PII, you were collecting data that you didn't have the capability to protect and should face a fine. There is a lot a company can do to protect data. If they demonstrate that they were following all those best practices re: encryption, storage, least privilege, etc. then that should absolutely factor in. At least to hold people accountable who store stuff in plain text and leave it on publicly accessible storage.
  - rooam-dev 7y ago
    That is not an excuse. Imagine not fining people for reckless driving.
  - kazen44 7y ago
    what? ofcourse you can. just look at any industry that puts people in danger when people make technically incompetent mistakes. even the most basic electrician is held to a higher standard then facebook in this regard...
kodablah 7y ago
Without new laws affecting the rest of us? Sounds good. More bad-company enforcement is better than more internet legislation on these issues at this time.
minimaxir 7y ago
> Every insider I've spoken to said any FTC fine on Facebook under $10 billion would be seen as a massive win, showing firm won't face serious consequences for privacy violations. Wall St. seems to agree in response to news of $3-$5b settlement [$FB up 4% after hours] https://twitter.com/lhfang/status/1121148735818358784 https://twitter.com/lhfang/status/1121148735818358784
- Dangeranger 7y ago
  Agreed. This small of a fine comes off as a cost of doing business for a company as large as Facebook.
  - cronix 7y ago
    This is why we need GDPR in the US. Make the fine like 5% of global annual profit (not sales). Something that will hurt and make them actually think it's not worth it and actively avoid it rather than just the cost of doing business and a snicker as they walk away.
    - EquallyJust 7y ago
      5% of FB revenue (55B) is $2.75B which is less than the proposed FTC fine of 5B. Making it be 5% of profit and not revenue would make it hurt even less.
    - goodfight 7y ago
      No thanks, I don't want to bow down to the censorship of the EU
      - deleted 7y ago
        [deleted]
    - president 7y ago
      Laws don't seem to matter in this day and age as they can be gamed by money and/or legal tricks. Only way to fix the issue is to get rid of corrupt and unethical government and business leaders. Implementing something like GDPR would only be adding to the arsenal of bad actors.
spaceheretostay 7y ago
Isn't that just like 1 month's worth of revenue? That amounts to absolutely nothing in today's world, not even an incentive to reduce the bad behavior. Jail time for lawbreaking executives needs to happen. The financial penalties do not dissuade bad behavior or act as a deterrent, so the same crimes will continue to be committed. Are there any peer-reviewed studies looking at deterrence of financial/tech/privacy crimes in the modern era? I would expect that in every case the penalty is lower than the profit, making it a continued incentive to break the law. The only thing these people value truly is their time on this Earth to be free and breathe fresh air. If they risk jail time when breaking these laws, I think we would see a reduction in intentional and repeated lawbreaking by large corporations.
- oh_sigh 7y ago
  1 month of revenue is how many months of profit?
  - danpalmer 7y ago
    They are fairly high margin relative to most industries, so probably less than 2 months of profit would be my guess.
    - matt4077 7y ago
      If only there was a way to find out how much profit a public company makes, instead of going three-deep in a threat with “would be my guess” numbers... FWIW, FB quarterly profits Q1, Q2, and Q3 2018 were 5.1, 5.1, and 6.9 billion, respectively: https://www.statista.com/statistics/223289/facebooks-quarterly-net-income/ https://www.statista.com/statistics/223289/facebooks-quarter...
      - danpalmer 7y ago
        There’s a place for estimates with reasoning. My intention was not to give the exact answer, which is often no that’s needed, but to help (in some small way) someone who doesn’t know how to get there build the reasoning that might get them enough of an answer.
askafriend 7y ago
This bump in the road aside, it's another $blowout$ quarter. Pretty impressive.
AdmiralAsshat 7y ago
Seems like they should add another 0 to the fine after the recent hat trick: 1) Prompting users to give Facebook their email passwords.[0] 2) Using that email access to "inadvertently" upload the information of their email contacts.[1] 3) Storing said passwords and others in plaintext. [2] It's pretty impressive that a company could do something so brazenly malevolent and be confident that they will escape with no more than a fine. [0] https://www.thedailybeast.com/beyond-sketchy-facebook-demanding-some-new-users-email-passwords https://www.thedailybeast.com/beyond-sketchy-facebook-demand... [1] https://www.theguardian.com/technology/2019/apr/18/facebook-uploaded-email-contacts-of-15m-users-without-consent https://www.theguardian.com/technology/2019/apr/18/facebook-... [2] https://krebsonsecurity.com/2019/03/facebook-stored-hundreds-of-millions-of-user-passwords-in-plain-text-for-years/ https://krebsonsecurity.com/2019/03/facebook-stored-hundreds...
- wnevets 7y ago
  > 3) Storing said passwords and others in plaintext. [2] in logs.
  - munk-a 7y ago
    If you're a small business - I get it, it's good to whitelist whatever information you're logging explicitly, but for smaller teams a hard to diagnose issue might lead the team to "log everything so we can sort it out later". Facebook is Facebook, whether this decision was the product of the corporation as a whole, a small dev team, or a highly paid consultant/third party, Facebook is a big enough company that they don't have the "I didn't realize..." excuse anymore.
    - fuzz4lyfe 7y ago
      Seems like a pretty trivial automated test for so many PHD's to miss: create_user('Bob', 'BobPassword123') assert "BobPassword123" not in logfile
      - munk-a 7y ago
onetimemanytime 7y ago
https://finance.yahoo.com/quote/FB/key-statistics?p=FB https://finance.yahoo.com/quote/FB/key-statistics?p=FB $55 Billion in revenue and EBITDA 29.23B and they get a $5 Billion fine for doing a lot of scummy, but profitable stuff. The best part for FB? Two years from now FB will say to FTC, "you already fined us once...the largest fine ever blah blah blah"
- fullshark 7y ago
  How is that good? Next time they will fine them more.
  - onetimemanytime 7y ago
    No they wont. Not in the good ol' USA. Pretty sure the fine was negotiated and agreed to by FB lobbyists.
hberg 7y ago
.....and $FB is up 6% in after-hours trading
beat 7y ago
Finding the right fine for actions like this is hard. On one hand, we (as a society) want it to hurt, to cause the company real pain. On the other hand, we don't want to actually destroy the company. This leads to a "cost of doing business" problem, where evil practices become a preferred path for management, if evil is sufficiently profitable. The underlying problem is that corporations are NOT people, whatever the law says, and the corporation itself has no inherent ethics or morality. The fire doesn't choose to burn the forest, it just does. edit: I suppose the problem in part is society. We see a beauty and symmetry in capitalism, so we assume beautiful == good, a philosophical failing going all the way back to the ancient Greeks. Just because it's beautiful and useful doesn't mean it's "good" in a moral sense.
- kodz4 7y ago
  The size of the forest fire matters. Facebook is probably the first company in history that can cause planet wide forest fires at scale and speed never possible before. That said I think they finally get that, after a long period of total denial. Not because of the fines and regulatory action which have come too late, but just from all the unintended unignorable consequences that have pilled up.
  - beat 7y ago
    Yeah. The loss of long-term customers over privacy issues, addiction issues, and general creepiness is probably a greater concern to them than a fine. I quit using Facebook because I realized it's actively unhealthy for me, and I've been "healing" since. They don't want the dribble of middle class tech nerds leaving the platform to become a flood.
    - deleted 7y ago
      [deleted]
- jammygit 7y ago
  "We don't want to actually destroy the company" It would be bad for investors, but... would it be that bad overall? I guess a replacement could theoretically be worse but they would have to commit to that ideal and not be dissuaded by the fate of their predecessors
jpmcglone 7y ago
Where exactly does that $ go?
bennettfeely 7y ago
Curious to where these fines go exactly?
artursapek 7y ago
Why doesn't Zuck just quit? He's so rich. I would have fucked off and retired so long ago.
- beat 7y ago
  Because he has one of the coolest toys in the world. Really, isn't running one of the biggest companies ever created a better retirement hobby than collecting stamps?
- rock_hard 7y ago
  I would guess because he truly cares about making the world more open and connected and issn't in it for the money. He also pledged to donate all his wealth along with Bill Gates and Warren Buffet
  - artursapek 7y ago
    I can't reconcile that with all of the evil shit Facebook does.
  - CharlesColeman 7y ago
    >> Why doesn't Zuck just quit? He's so rich. I would have fucked off and retired so long ago. > I would guess because he truly cares about making the world more open and connected and issn't in it for the money. It's more likely that he just likes being powerful and in charge of something big. If he just "fucked off and retired" the power he'd wield would be much less.
  - ionised 7y ago
    Well it's a nice way of not having your wealth taxed isn't it? Then, when your children are all grown up you can get around those promises you made to the pesky public about not giving your privileged children billions of dollars by simply making them life-long directors of your charitable foundation. Besides, some of the most evil and warped people in history were convinced they were somehow making the world better even in the face of overwhelming evidence to the contrary. We call these people ideologues and fundamentalists.
- 7y ago
markdoubleyou 7y ago
"The Silicon Valley company and the F.T.C.'s consumer protection and enforcement staff have been in negotiations for months over a financial penalty" Honest question: What gets negotiated in this kind of settlement? What leverage does Facebook have in this situation to say, "no, that fine is too high"?
- samsonradu 7y ago
  I'd assume it would look something like: "No, that fine is too high. We'll settle this in court(s) since we think we can do better." Now the FTC is facing a potentially big delay and a risk of no fine if the courts eventually hand Facebook a favorable decision.
  - cjhopman 7y ago
    > Now the FTC is facing a potentially big delay and a risk of no fine The risk is much higher than that. There's a risk that a court rejects the entire justification for the fine greatly reducing both the ftc's ability to impose future fines and their power in general.
libraryatnight 7y ago
I feel like we need something better than fines. It really seems like fines are just becoming part of the cost of business to people with sufficient amounts of money. That could also just be the angry techno-cynic in me though.
- deleted 7y ago
  [deleted]
throwaway100773 7y ago
Too big to fine.
julienreszka 7y ago
As a Facebook ads consumer I'm disappointed that Facebook sucks so much when it comes to security. I pay lots of money to build a community on my pages I don't want my real estate to lose value because they are negligent
i_am_proteus 7y ago
To put the fine in context: Facebook reported $2.4B net profit for 1Q19, including a $3B Provision for legal expenses related to the FTC inquiry. This is a material but hardly back-breaking fine.
joejohnson 7y ago
Yet the stock is up almost 10% in after hours trading... the fine is not nearly enough to discourage criminal wrongdoing. https://finance.yahoo.com/quote/fb?ltr=1 https://finance.yahoo.com/quote/fb?ltr=1
- orijing 7y ago
  It's almost as if the company reported earnings that beat expectations...
- murat124 7y ago
  Not only that but it looks more like government is asking for its cut of the profit FB has made.
shubhamjain 7y ago
It seems beside the "the bug bounty is far less than it would have sold for in the dark market" another meme has taken hold of HN. No matter how significant the fine is, there always be people clamoring how trivial it is compared to their revenues. It could have been $10B and you would hear the same thing. The only fine, then, worth slapping is one that bankrupts the entire company. Facebook made ~$7B net income in 2018. Am I supposed to believe that $5B fine isn't going to affect them at all?
- monochromatic 7y ago
  The fine should be high enough to nullify any profit they made from their malfeasance, plus some amount as punitive damages to discourage the behavior in the future.
- cowpig 7y ago
  Facebook earned about $172 billion since 2013. Do you think facebook would have earned $167 billion while behaving legally? What about ethically? How much do you think Facebook would have earned if it acted responsibly? Once you add punitive damages, I don't understand how you could possibly think $5 billion is anything less than an order of magnitude off.
  - cjhopman 7y ago
    > Facebook earned about $172 billion since 2013. Do you think facebook would have earned $167 billion while behaving legally? Considering the fine seems to be primarily based on something they stopped doing in 2014, yeah, I think they'd have easily earned $167 billion without doing it.
  - djakjxnanjak 7y ago
    This fine is not for everything unethical Facebook ever did. This fine is for Facebook giving data to Cambridge Analytica. I don’t think Facebook got paid for that at all. When trying to google around for what people paid CA for the use of the data, I found numbers in the hundreds of thousands. So in fact, Facebook is paying billions because they made a bad decision when choosing to grant access to data for research. That’s a lot of money. I think if you’d asked what a likely fine was when the story broke, people would have guessed a few million dollars.
TheTruth1234 7y ago
And they'll shrug at $5b ... A fine is not enough in this situation ...
deleted 7y ago
[deleted]
annihilate 7y ago
Just destroy the company. Reduce it to nothing but smoldering rubble. Take everything Facebook is, and burn it until it's unrecognizable. Flush the wreckage down the toilet. Take all the data centers. All the bare metal. All the semiconductors, printed circuit board, cooling fans, wiring and fiber optics, toss it into the slag lagoon of some disused strip mine. Take all the former employees and assign them to boondoggle re-education camps that they cannot leave until they acknowledge that the entire upper eschelon of the company was a zoo of useless quacks. Zuckerberg himself should land in the cell previously reserved for Bradley/Chelsea Manning. His crimes are fundamentally equivalent, if you want to split hairs. The two only differ in scale and audience. Mutually exclusive counterparts of each other if you stop to think about it for a moment. And then? What comes next? I'm not sure. This is whole thing is a bad hangover we need to sleep off. What were things like before this nightmare. We need to gain some distance to acquire the proper context, and find our bearings before charting another course. I remember what things were like before. What they were supposed to become, before this horrendously rude interruption. But then millions of people dumped their lives out in the open, and it got used against us, and look where we are now. Clearly, discretion is the better part of valor.
rhizome 7y ago
Extremely non-deterrent.
waplot 7y ago
Can someone explain what happens to the money when a big company pays a government agency this much? Does it go into the federal budget? or does the ftc use it for its own purposes?
- dredmorbius 7y ago
  For US gov't, the Federal Treasury. Victims may also be compensated. https://www.sfgate.com/business/networth/article/When-government-fines-companies-who-gets-cash-3189724.php https://www.sfgate.com/business/networth/article/When-govern...
joering2 7y ago
Great news! Now that investors know how much the bank robbers have to return as a form of punishment, they are on their way to the next bank. Stock is up breaking $200 after hours, and we will see you all +40% up in few years at the next "punishment pit stop".
robbrown451 7y ago
They should take that $5 billion and use it to fund an alternative to Facebook. (and one that is smart as to how to approach it, given Facebook's network monopoly. I.e. it should allow you to "use Facebook" in the same way I "use Yahoo mail" when I communicate with a Yahoo mail user from my Gmail account)
- SlowRobotAhead 7y ago
  I want a government run Facebook as much as I want a Facebook run Facebook.
  - robbrown451 7y ago
    I didn't say a government run Facebook. You're using an internet that came from government funding, btw.
blairanderson 7y ago
> Mobile advertising revenue represented approximately 93% of advertising revenue for the first quarter of 2019, up from approximately 91% of advertising revenue in the first quarter of 2018. holy shit
crakenzak 7y ago
If Facebook is being charged this much for their (pretty serious) privacy issues, Equifax deserves to be shut down and have their lead executives face jail time. I'm not defending Facebook, but I feel like whenever a huge financial instiitution does something, they're treated as a protected class, but other companies get hit pretty hard (justifiably)
ChrisCinelli 7y ago
Everybody was doing it... Yelp, Linkedin, Facebook, and a few other big network that are no more: https://blog.codinghorror.com/please-give-us-your-email-password/ https://blog.codinghorror.com/please-give-us-your-email-pass...
z92 7y ago
Facebook was evil because it was a "walled garden". And after Cambridge Analytica it's evil because "it wasn't a walled garden."
kenneth 7y ago
You read the headlines all the time about the EU fining whatever tech company some insane amount. I'm curious, though, if Google, Facebook, etc. actually pay the amount. I would expect them to fight these judgement tooth and nail, and do everything they can to avoid complying.
tgb29 7y ago
Will the money go to some government black hole? Seems like a waste of resources. How about requiring Facebook to offer better services or open source more tech.
- bryan_w 7y ago
  Let's just say someone is building a wall
revskill 7y ago
Still waiting for the day where social network is not based on identity, but based on real, useful content. More than that, treat email just like password. That means, force users to change email regularly so that it's not leaked. We need a better email system.
gnorpNorp 7y ago
Abiding by the rules is more important than quality.
xtat 7y ago
not enough
tsycho 7y ago
Since the fine hasn't been decided by the FTC yet, I am not sure I see the point of declaring a number? For instance, if the FTC was going to be happy with say a $4bn fine, this tells them that FB is happy to pay $5bn. The only reason I can think of is that FB is quite sure the fine wouldn't be less than $5bn (maybe FB is asking for significantly higher), and they are trying to price-anchor it. Maybe this is a way of telling FTC that FB will accept something close to $5bn without any lawsuits or other appeals, don't try to negotiate more?
nameisu 7y ago
part of doing business
tjpnz 7y ago
You can find FB all day and it probably won't change a thing, but what if execs could be held personally liable for said transgressions?
cerealbad 7y ago
The diffusion of responsibility here is pretty galling. It's not Facebook it's employees at Facebook. Facebook is people not a person. If nobody steps up then the leaders need to take responsibility.
MarkMc 7y ago
It's interesting to consider the psychological aspect here. By publicly saying they expect a fine in the range $3-5 billion, Facebook increases the chance that the regulators ultimately decide on a figure in that range or close to it. This is an example of 'anchoring effect' : https://en.m.wikipedia.org/wiki/Anchoring https://en.m.wikipedia.org/wiki/Anchoring Given this effect, Facebook has an incentive to 'low-ball' their estimate.
richardhod 7y ago
I did read this as $58 for several seconds, making 5B a suboptimal abbreviation
drb91 7y ago
They can really do whatever they want and get away with it. I can't say I'm surprised.
meh206 7y ago
Good. They're a scummy company offering a scummy service to a society of self-absorbed users eager to buy the b.s. others are selling or vice versa. Commoditizing people like Silicon Valley companies have done is criminal nearly everywhere but the USA.
AltmousGadfly 7y ago
Get off Facebook. That's the only message Zuckerberg & Co will understand.
consultSKI 7y ago
shut'em down. only fix that will actually fix the core problem.

562 points by Dangeranger 7y ago

deleted 7y ago

[deleted]

This is pocket change for them. Reminds me of how they fine oil companies $50,000 and another $450,000 for violations. When they are making billions off of violating user privacy and will continue to keep using that user data for future business, this fine is nothing to them. It's like I manipulatively steal $10 from a million people and only lose a few bucks. They still profited.

lucasmullens 7y ago
$5,000,000,000 reminds you of $50,000? A fine of 1% of Facebook's value seems a bit more than pocket change.
- lordnacho 7y ago
  What? FB's value naturally changes by more that 1% on quite a lot of days each year, without this fine. Put it another way: if you took all of the daily market cap changes of FB's stock, but added -1% to one of them, could you pick out which one it was?
  - lucasmullens 7y ago
    How does that make it not matter? My savings in the stock market do the same thing, but if I got a fine/bill that was 1% of my net worth, it would still be a huge deal.
    - lordnacho 7y ago
      If your net worth changes often randomly covered the fine amount, it is very different from if you were say a pensioner on a fixed income. Having had days where NW changed by entire year's salaries, I can say it makes a huge difference to how you see it.
- busymom0 7y ago
  It is 5 billion but that's nothing considering they make 15 billion and more in future using the unethical practices. It's like me stealing your car and only being fined for the wheel and I still get to keep the car.
- ionised 7y ago
  1% of anything's value is pocket change. It's not about how much money it is to you or me, but how much money it is to Facebook. And it's not a lot.

product50 7y ago

Before this thread becomes a Facebook bashing session, please keep in mind that Equifax leaked all your SSN data along with names and addresses and got away with no fines.

crushcrashcrush 7y ago
Leaking this data wasn't an intrinsic part of their business model.
- paxy 7y ago
  It is, even more so than Facebook. Buying and selling your personal financial data is Equifax's entire business.
jokoon 7y ago
Whataboutism...
- lordnacho 7y ago
  Similar punishment for similar transgressions is how the law is supposed to work.
  - munk-a 7y ago
    Assuming those punishments are fair and just - the punishments companies have been getting lately for privacy violations have been relatively consistent - nobody is actually being punished.
  - CharlesColeman 7y ago
    > Similar punishment for similar transgressions is how the law is supposed to work. Facebook and Equifax did not commit similar transgressions, and to say to is misleading.
    - lordnacho 7y ago

TACIXAT 7y ago

This would be awesome if it applied to security breaches as well. Not sure how you would fine OPM, but there are a ton of consumer companies that have leaked data like a sieve.

zavi 7y ago
You cannot fine companies for being technically incompetent.
- spaceheretostay 7y ago
  Surely you can - that could amount to criminal negligence which is definitely a crime.
  - gtirloni 7y ago
    Yes, you can and should. But how do you define negligence in IT? We don't have the same codified norms as civil engineering so it'd be very subjective.
    - TACIXAT 7y ago
      I feel the best test was "did you get breached? what data was taken?", if the answers are yes and PII, you were collecting data that you didn't have the capability to protect and should face a fine. There is a lot a company can do to protect data. If they demonstrate that they were following all those best practices re: encryption, storage, least privilege, etc. then that should absolutely factor in. At least to hold people accountable who store stuff in plain text and leave it on publicly accessible storage.
- rooam-dev 7y ago
  That is not an excuse. Imagine not fining people for reckless driving.
- kazen44 7y ago
  what? ofcourse you can. just look at any industry that puts people in danger when people make technically incompetent mistakes. even the most basic electrician is held to a higher standard then facebook in this regard...

kodablah 7y ago

Without new laws affecting the rest of us? Sounds good. More bad-company enforcement is better than more internet legislation on these issues at this time.

minimaxir 7y ago

> Every insider I've spoken to said any FTC fine on Facebook under $10 billion would be seen as a massive win, showing firm won't face serious consequences for privacy violations. Wall St. seems to agree in response to news of $3-$5b settlement [$FB up 4% after hours] https://twitter.com/lhfang/status/1121148735818358784 https://twitter.com/lhfang/status/1121148735818358784

Dangeranger 7y ago
Agreed. This small of a fine comes off as a cost of doing business for a company as large as Facebook.
- cronix 7y ago
  This is why we need GDPR in the US. Make the fine like 5% of global annual profit (not sales). Something that will hurt and make them actually think it's not worth it and actively avoid it rather than just the cost of doing business and a snicker as they walk away.
  - EquallyJust 7y ago
    5% of FB revenue (55B) is $2.75B which is less than the proposed FTC fine of 5B. Making it be 5% of profit and not revenue would make it hurt even less.
  - goodfight 7y ago
    No thanks, I don't want to bow down to the censorship of the EU
    - deleted 7y ago
      [deleted]
  - president 7y ago
    Laws don't seem to matter in this day and age as they can be gamed by money and/or legal tricks. Only way to fix the issue is to get rid of corrupt and unethical government and business leaders. Implementing something like GDPR would only be adding to the arsenal of bad actors.

spaceheretostay 7y ago

Isn't that just like 1 month's worth of revenue? That amounts to absolutely nothing in today's world, not even an incentive to reduce the bad behavior. Jail time for lawbreaking executives needs to happen. The financial penalties do not dissuade bad behavior or act as a deterrent, so the same crimes will continue to be committed. Are there any peer-reviewed studies looking at deterrence of financial/tech/privacy crimes in the modern era? I would expect that in every case the penalty is lower than the profit, making it a continued incentive to break the law. The only thing these people value truly is their time on this Earth to be free and breathe fresh air. If they risk jail time when breaking these laws, I think we would see a reduction in intentional and repeated lawbreaking by large corporations.

oh_sigh 7y ago
1 month of revenue is how many months of profit?
- danpalmer 7y ago
  They are fairly high margin relative to most industries, so probably less than 2 months of profit would be my guess.
  - matt4077 7y ago
    If only there was a way to find out how much profit a public company makes, instead of going three-deep in a threat with “would be my guess” numbers... FWIW, FB quarterly profits Q1, Q2, and Q3 2018 were 5.1, 5.1, and 6.9 billion, respectively: https://www.statista.com/statistics/223289/facebooks-quarterly-net-income/ https://www.statista.com/statistics/223289/facebooks-quarter...
    - danpalmer 7y ago
      There’s a place for estimates with reasoning. My intention was not to give the exact answer, which is often no that’s needed, but to help (in some small way) someone who doesn’t know how to get there build the reasoning that might get them enough of an answer.

askafriend 7y ago

This bump in the road aside, it's another $blowout$ quarter. Pretty impressive.

AdmiralAsshat 7y ago

Seems like they should add another 0 to the fine after the recent hat trick: 1) Prompting users to give Facebook their email passwords.[0] 2) Using that email access to "inadvertently" upload the information of their email contacts.[1] 3) Storing said passwords and others in plaintext. [2] It's pretty impressive that a company could do something so brazenly malevolent and be confident that they will escape with no more than a fine. [0] https://www.thedailybeast.com/beyond-sketchy-facebook-demanding-some-new-users-email-passwords https://www.thedailybeast.com/beyond-sketchy-facebook-demand... [1] https://www.theguardian.com/technology/2019/apr/18/facebook-uploaded-email-contacts-of-15m-users-without-consent https://www.theguardian.com/technology/2019/apr/18/facebook-... [2] https://krebsonsecurity.com/2019/03/facebook-stored-hundreds-of-millions-of-user-passwords-in-plain-text-for-years/ https://krebsonsecurity.com/2019/03/facebook-stored-hundreds...

wnevets 7y ago
> 3) Storing said passwords and others in plaintext. [2] in logs.
- munk-a 7y ago
  If you're a small business - I get it, it's good to whitelist whatever information you're logging explicitly, but for smaller teams a hard to diagnose issue might lead the team to "log everything so we can sort it out later". Facebook is Facebook, whether this decision was the product of the corporation as a whole, a small dev team, or a highly paid consultant/third party, Facebook is a big enough company that they don't have the "I didn't realize..." excuse anymore.
  - fuzz4lyfe 7y ago
    Seems like a pretty trivial automated test for so many PHD's to miss: create_user('Bob', 'BobPassword123') assert "BobPassword123" not in logfile
    - munk-a 7y ago

onetimemanytime 7y ago

https://finance.yahoo.com/quote/FB/key-statistics?p=FB https://finance.yahoo.com/quote/FB/key-statistics?p=FB $55 Billion in revenue and EBITDA 29.23B and they get a $5 Billion fine for doing a lot of scummy, but profitable stuff. The best part for FB? Two years from now FB will say to FTC, "you already fined us once...the largest fine ever blah blah blah"

fullshark 7y ago
How is that good? Next time they will fine them more.
- onetimemanytime 7y ago
  No they wont. Not in the good ol' USA. Pretty sure the fine was negotiated and agreed to by FB lobbyists.

hberg 7y ago

.....and $FB is up 6% in after-hours trading

beat 7y ago

Finding the right fine for actions like this is hard. On one hand, we (as a society) want it to hurt, to cause the company real pain. On the other hand, we don't want to actually destroy the company. This leads to a "cost of doing business" problem, where evil practices become a preferred path for management, if evil is sufficiently profitable. The underlying problem is that corporations are NOT people, whatever the law says, and the corporation itself has no inherent ethics or morality. The fire doesn't choose to burn the forest, it just does. edit: I suppose the problem in part is society. We see a beauty and symmetry in capitalism, so we assume beautiful == good, a philosophical failing going all the way back to the ancient Greeks. Just because it's beautiful and useful doesn't mean it's "good" in a moral sense.

kodz4 7y ago
The size of the forest fire matters. Facebook is probably the first company in history that can cause planet wide forest fires at scale and speed never possible before. That said I think they finally get that, after a long period of total denial. Not because of the fines and regulatory action which have come too late, but just from all the unintended unignorable consequences that have pilled up.
- beat 7y ago
  Yeah. The loss of long-term customers over privacy issues, addiction issues, and general creepiness is probably a greater concern to them than a fine. I quit using Facebook because I realized it's actively unhealthy for me, and I've been "healing" since. They don't want the dribble of middle class tech nerds leaving the platform to become a flood.
  - deleted 7y ago
    [deleted]
jammygit 7y ago
"We don't want to actually destroy the company" It would be bad for investors, but... would it be that bad overall? I guess a replacement could theoretically be worse but they would have to commit to that ideal and not be dissuaded by the fate of their predecessors

jpmcglone 7y ago

Where exactly does that $ go?

bennettfeely 7y ago

Curious to where these fines go exactly?

artursapek 7y ago

Why doesn't Zuck just quit? He's so rich. I would have fucked off and retired so long ago.

beat 7y ago
Because he has one of the coolest toys in the world. Really, isn't running one of the biggest companies ever created a better retirement hobby than collecting stamps?
rock_hard 7y ago
I would guess because he truly cares about making the world more open and connected and issn't in it for the money. He also pledged to donate all his wealth along with Bill Gates and Warren Buffet
- artursapek 7y ago
  I can't reconcile that with all of the evil shit Facebook does.
- CharlesColeman 7y ago
  >> Why doesn't Zuck just quit? He's so rich. I would have fucked off and retired so long ago. > I would guess because he truly cares about making the world more open and connected and issn't in it for the money. It's more likely that he just likes being powerful and in charge of something big. If he just "fucked off and retired" the power he'd wield would be much less.
- ionised 7y ago
  Well it's a nice way of not having your wealth taxed isn't it? Then, when your children are all grown up you can get around those promises you made to the pesky public about not giving your privileged children billions of dollars by simply making them life-long directors of your charitable foundation. Besides, some of the most evil and warped people in history were convinced they were somehow making the world better even in the face of overwhelming evidence to the contrary. We call these people ideologues and fundamentalists.
7y ago

markdoubleyou 7y ago

"The Silicon Valley company and the F.T.C.'s consumer protection and enforcement staff have been in negotiations for months over a financial penalty" Honest question: What gets negotiated in this kind of settlement? What leverage does Facebook have in this situation to say, "no, that fine is too high"?

samsonradu 7y ago
I'd assume it would look something like: "No, that fine is too high. We'll settle this in court(s) since we think we can do better." Now the FTC is facing a potentially big delay and a risk of no fine if the courts eventually hand Facebook a favorable decision.
- cjhopman 7y ago
  > Now the FTC is facing a potentially big delay and a risk of no fine The risk is much higher than that. There's a risk that a court rejects the entire justification for the fine greatly reducing both the ftc's ability to impose future fines and their power in general.

libraryatnight 7y ago

I feel like we need something better than fines. It really seems like fines are just becoming part of the cost of business to people with sufficient amounts of money. That could also just be the angry techno-cynic in me though.

deleted 7y ago
[deleted]

throwaway100773 7y ago

Too big to fine.

julienreszka 7y ago

As a Facebook ads consumer I'm disappointed that Facebook sucks so much when it comes to security. I pay lots of money to build a community on my pages I don't want my real estate to lose value because they are negligent

i_am_proteus 7y ago

To put the fine in context: Facebook reported $2.4B net profit for 1Q19, including a $3B Provision for legal expenses related to the FTC inquiry. This is a material but hardly back-breaking fine.

joejohnson 7y ago

Yet the stock is up almost 10% in after hours trading... the fine is not nearly enough to discourage criminal wrongdoing. https://finance.yahoo.com/quote/fb?ltr=1 https://finance.yahoo.com/quote/fb?ltr=1

orijing 7y ago
It's almost as if the company reported earnings that beat expectations...
murat124 7y ago
Not only that but it looks more like government is asking for its cut of the profit FB has made.

shubhamjain 7y ago

It seems beside the "the bug bounty is far less than it would have sold for in the dark market" another meme has taken hold of HN. No matter how significant the fine is, there always be people clamoring how trivial it is compared to their revenues. It could have been $10B and you would hear the same thing. The only fine, then, worth slapping is one that bankrupts the entire company. Facebook made ~$7B net income in 2018. Am I supposed to believe that $5B fine isn't going to affect them at all?

monochromatic 7y ago
The fine should be high enough to nullify any profit they made from their malfeasance, plus some amount as punitive damages to discourage the behavior in the future.
cowpig 7y ago
Facebook earned about $172 billion since 2013. Do you think facebook would have earned $167 billion while behaving legally? What about ethically? How much do you think Facebook would have earned if it acted responsibly? Once you add punitive damages, I don't understand how you could possibly think $5 billion is anything less than an order of magnitude off.
- cjhopman 7y ago
  > Facebook earned about $172 billion since 2013. Do you think facebook would have earned $167 billion while behaving legally? Considering the fine seems to be primarily based on something they stopped doing in 2014, yeah, I think they'd have easily earned $167 billion without doing it.
- djakjxnanjak 7y ago
  This fine is not for everything unethical Facebook ever did. This fine is for Facebook giving data to Cambridge Analytica. I don’t think Facebook got paid for that at all. When trying to google around for what people paid CA for the use of the data, I found numbers in the hundreds of thousands. So in fact, Facebook is paying billions because they made a bad decision when choosing to grant access to data for research. That’s a lot of money. I think if you’d asked what a likely fine was when the story broke, people would have guessed a few million dollars.

TheTruth1234 7y ago

And they'll shrug at $5b ... A fine is not enough in this situation ...

deleted 7y ago

[deleted]

annihilate 7y ago

Just destroy the company. Reduce it to nothing but smoldering rubble. Take everything Facebook is, and burn it until it's unrecognizable. Flush the wreckage down the toilet. Take all the data centers. All the bare metal. All the semiconductors, printed circuit board, cooling fans, wiring and fiber optics, toss it into the slag lagoon of some disused strip mine. Take all the former employees and assign them to boondoggle re-education camps that they cannot leave until they acknowledge that the entire upper eschelon of the company was a zoo of useless quacks. Zuckerberg himself should land in the cell previously reserved for Bradley/Chelsea Manning. His crimes are fundamentally equivalent, if you want to split hairs. The two only differ in scale and audience. Mutually exclusive counterparts of each other if you stop to think about it for a moment. And then? What comes next? I'm not sure. This is whole thing is a bad hangover we need to sleep off. What were things like before this nightmare. We need to gain some distance to acquire the proper context, and find our bearings before charting another course. I remember what things were like before. What they were supposed to become, before this horrendously rude interruption. But then millions of people dumped their lives out in the open, and it got used against us, and look where we are now. Clearly, discretion is the better part of valor.

rhizome 7y ago

Extremely non-deterrent.

waplot 7y ago

Can someone explain what happens to the money when a big company pays a government agency this much? Does it go into the federal budget? or does the ftc use it for its own purposes?

dredmorbius 7y ago
For US gov't, the Federal Treasury. Victims may also be compensated. https://www.sfgate.com/business/networth/article/When-government-fines-companies-who-gets-cash-3189724.php https://www.sfgate.com/business/networth/article/When-govern...

joering2 7y ago

Great news! Now that investors know how much the bank robbers have to return as a form of punishment, they are on their way to the next bank. Stock is up breaking $200 after hours, and we will see you all +40% up in few years at the next "punishment pit stop".

robbrown451 7y ago

They should take that $5 billion and use it to fund an alternative to Facebook. (and one that is smart as to how to approach it, given Facebook's network monopoly. I.e. it should allow you to "use Facebook" in the same way I "use Yahoo mail" when I communicate with a Yahoo mail user from my Gmail account)

SlowRobotAhead 7y ago
I want a government run Facebook as much as I want a Facebook run Facebook.
- robbrown451 7y ago
  I didn't say a government run Facebook. You're using an internet that came from government funding, btw.

blairanderson 7y ago

> Mobile advertising revenue represented approximately 93% of advertising revenue for the first quarter of 2019, up from approximately 91% of advertising revenue in the first quarter of 2018. holy shit

crakenzak 7y ago

If Facebook is being charged this much for their (pretty serious) privacy issues, Equifax deserves to be shut down and have their lead executives face jail time. I'm not defending Facebook, but I feel like whenever a huge financial instiitution does something, they're treated as a protected class, but other companies get hit pretty hard (justifiably)

ChrisCinelli 7y ago

Everybody was doing it... Yelp, Linkedin, Facebook, and a few other big network that are no more: https://blog.codinghorror.com/please-give-us-your-email-password/ https://blog.codinghorror.com/please-give-us-your-email-pass...

z92 7y ago

Facebook was evil because it was a "walled garden". And after Cambridge Analytica it's evil because "it wasn't a walled garden."

kenneth 7y ago

You read the headlines all the time about the EU fining whatever tech company some insane amount. I'm curious, though, if Google, Facebook, etc. actually pay the amount. I would expect them to fight these judgement tooth and nail, and do everything they can to avoid complying.

tgb29 7y ago

Will the money go to some government black hole? Seems like a waste of resources. How about requiring Facebook to offer better services or open source more tech.

bryan_w 7y ago
Let's just say someone is building a wall

revskill 7y ago

Still waiting for the day where social network is not based on identity, but based on real, useful content. More than that, treat email just like password. That means, force users to change email regularly so that it's not leaked. We need a better email system.

gnorpNorp 7y ago

Abiding by the rules is more important than quality.

xtat 7y ago

not enough

tsycho 7y ago

Since the fine hasn't been decided by the FTC yet, I am not sure I see the point of declaring a number? For instance, if the FTC was going to be happy with say a $4bn fine, this tells them that FB is happy to pay $5bn. The only reason I can think of is that FB is quite sure the fine wouldn't be less than $5bn (maybe FB is asking for significantly higher), and they are trying to price-anchor it. Maybe this is a way of telling FTC that FB will accept something close to $5bn without any lawsuits or other appeals, don't try to negotiate more?

nameisu 7y ago

part of doing business

tjpnz 7y ago

You can find FB all day and it probably won't change a thing, but what if execs could be held personally liable for said transgressions?

cerealbad 7y ago

The diffusion of responsibility here is pretty galling. It's not Facebook it's employees at Facebook. Facebook is people not a person. If nobody steps up then the leaders need to take responsibility.

MarkMc 7y ago

It's interesting to consider the psychological aspect here. By publicly saying they expect a fine in the range $3-5 billion, Facebook increases the chance that the regulators ultimately decide on a figure in that range or close to it. This is an example of 'anchoring effect' : https://en.m.wikipedia.org/wiki/Anchoring https://en.m.wikipedia.org/wiki/Anchoring Given this effect, Facebook has an incentive to 'low-ball' their estimate.

richardhod 7y ago

I did read this as $58 for several seconds, making 5B a suboptimal abbreviation

drb91 7y ago

They can really do whatever they want and get away with it. I can't say I'm surprised.

meh206 7y ago

Good. They're a scummy company offering a scummy service to a society of self-absorbed users eager to buy the b.s. others are selling or vice versa. Commoditizing people like Silicon Valley companies have done is criminal nearly everywhere but the USA.

AltmousGadfly 7y ago

Get off Facebook. That's the only message Zuckerberg & Co will understand.

consultSKI 7y ago

shut'em down. only fix that will actually fix the core problem.