Senators not happy over reported $5 billion Facebook agreement with the FTC
Lawmakers want answers, including how the commission calculated the fineBy Cal Jeffrey 7 comments
A hot potato: Some Democratic lawmakers are not satisfied with the $5 billion fine that Facebook has negotiated with the FTC. Three senators have penned a letter to the commission demanding answer regarding the settlement.
It was only last week that Facebook agreed to a $5 billion settlement with the Federal Trade Commission over privacy violations. At the time, we predicted that the penalty might be too small to dissuade the social media titan to adjust its Big Data business model. Apparently, Congress was thinking along those same lines.
Today, Senators Richard Blumenthal, Josh Hawley, and Ed Markey made public a letter they sent to the FTC expressing concerns that the fine is "woefully inadequate."
"It is clear that a $5 billion fine alone is a far cry from the type of monetary figure that would alter the incentives and behavior of Facebook and its peers," the Senators write. "We are highly disappointed to learn that the Commission has apparently failed to reach a strong, bipartisan agreement, sending the wrong message to tech companies."
The congressmen requested that the FTC be forthcoming with answers to several questions. For one, they would like to know how the Commission calculated the amount of the penalty and if it determined how much revenue Facebook generated directly from its privacy violations.
"Facebook's infringements of the 2011 consent decree and its pattern of violating user trust have been both vast and brazen... [the settlement] will fail to hold Facebook accountable for its actions."
They would also like to know if CEO Mar Zuckerberg provided any documents or answered any questions during the investigation and if not, why he didn't.
The lawmakers are also concerned whether Zuckerberg or any of Facebook's management are named in the settlement, whether or not the FTC plans on imposing new restrictions on the company, and whether the agreement prompts any new regulations of its upcoming Libra cryptocurrency offering.
The senators' concerns come on the heels of reports that Facebook's market cap rocketed over $10 billion after news of the $5 billion agreement. Many feel that the fine was only a slap on the wrist for a company that had more than $15 billion in revenue just last quarter.
The FTC has until August 6, 2019 to respond to the lawmakers' queries.