Partisan Divide on FTC's Facebook Settlement Terms Appears to Continue
Republicans and Democrats at the FTC still appear divided over what remedies should be included in the agency’s potential privacy settlement with Facebook (see 1905130031), tech observers said in interviews this week. They disagreed whether the agency is taking an unprecedented amount of time to settle, especially considering the probe could include violations beyond the Cambridge Analytica breach (see 1803260039). There's disagreement if the agency should hold CEO Mark Zuckerberg personally liable for his platform’s privacy miscues.
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Recent comments from Chairman Joe Simons and Commissioner Rohit Chopra suggest the two sides aren't on the same page about holding Zuckerberg accountable, R Street Institute Technology Policy Manager Tom Struble said. A reported settlement appeared to fall apart because Democrats weren’t willing to support a deal that didn’t include specific executive accountability, Struble said. Given this is Simons’ first major enforcement action, he’ll want to gain the support of at least one Democratic commissioner, he said. If there’s a 3-2 settlement, Democratic lawmakers will likely argue the deal doesn’t go far enough. The FTC and Facebook didn’t comment.
Tech hawks like Sens. Richard Blumenthal, D-Conn., and Josh Hawley, R-Mo., have demanded a swift conclusion to the settlement. But American Action Forum Technology and Innovation Policy Director Will Rinehart said observers should trust the process, citing other yearslong efforts by the agency.
The FTC settled with Google for $22.5 million for violating a prior privacy agreement. The alleged violations took place in late 2011 and early 2012, and the FTC announced the deal in August 2012. LifeLock settled with the FTC in December 2015 for $100 million over alleged data security violations between October 2012 and March 2014.
The agency is taking too long, Public Citizen Digital Rights Advocate Kristen Strader said, arguing both Zuckerberg and the company need to be held liable. Consumer advocates have argued the size of the fine, which Facebook estimated in the $3 billion-$5 billion range (see 1904240064), isn't as relevant as the structural remedies that should be included. The company should be forced to incorporate independent privacy auditors to eliminate problematic business practices, Strader said. She noted the company’s stock surged after it released its earnings report with the FTC fine estimate. The company, she said, should also be forced to hire a more diverse workforce, to avoid discriminatory targeting and data practices, which have drawn the attention of regulators and lawmakers (see 1903280063).
Establishing a Facebook privacy board is “potentially a more fruitful area of focus” than potential monetary and executive penalties, TechFreedom President Berin Szoka said. Such structural changes are less problematic, depending on how stringent, than holding individuals liable, Szoka said. He agreed with Simons’ assertion that naming executives demands a lot of resources and can limit the agency’s ability to enforce other cases. Naming executives also raises constitutional issues, Szoka said. The agency typically names executives in order to hold the owners of shell companies accountable, so that they can’t conceal future illegal activity behind separate corporations, Szoka said.
Regardless of the structural remedies, this is sure to be the agency’s largest fine, which is notable, AAFT's Rinehart said. Specific remedies could help inform the current legislative debate on privacy before the Senate Commerce Committee and Congress in general, he said: Lawmakers will be able to better understand what authorities the agency needs with details from the settlement.