May 6, 2019

How to read a Facebook privacy settlement

Facebook CEO Mark Zuckerberg. Photo: Artur Widak/NurPhoto via Getty Images

The Federal Trade Commission could vote on a settlement with Facebook over the social giant's alleged privacy failures as soon as this week, according to the NYT.

The latest: The New York Times' Cecilia Kang and the Washington Post's Tony Romm have reported on details of the settlement negotiations, including the internal debate over how far a penalty should go.

Here's our guide for cutting through the spin to understand what this news actually means for Mark Zuckerberg's behemoth.

Key questions to keep in mind:

  1. How big is the fine, really? It will likely set a record, but remember that Facebook made more than $15 billion in revenue in the first three months of this year. On the other hand, the record FTC fine in a case like this is only $22.5 million. So the $3 to $5 billion fine Facebook predicts would be a major shift.
  2. Will Facebook be forced to change its foundational business practices? Facebook made that $15 billion last quarter by doing what it’s done for a decade: collecting user data and letting advertisers mine it to target those users. The New York Times reports that the settlement will likely leave that basic way of doing business alone.
  3. How does the agency scrutinize Facebook going forward? The social network has told the FTC it is willing to put its data practices under additional scrutiny, according to the Washington Post, including privacy reviews of new products.
  4. Who will make sure Facebook complies? Critics have said that independent audits, which have monitored Facebook's compliance with a previous settlement, aren't enough.
  5. What about Mark? According to the NYT, one matter dividing FTC commissioners is whether or not to personally penalize Mark Zuckerberg. This matters to the direction of the company, because he isn't going anywhere.

Yes, but: The amount the FTC can seek in a court case against a company is limited by law.

  • The agency also has to think about the resources it would use if, instead of settling, it took the costly step of pressing a case against Facebook.

Be smart: Both the FTC’s Republican chairman Joe Simons and the tech industry will have an incentive to paint any settlement as strong.

  • The spin is already flowing. After Facebook predicted it would face a multibillion fine, the industry group NetChoice, which represents Facebook, said that the “expected fine demonstrates to consumers and European regulators that the FTC is serious about privacy.”
  • Portraying a settlement as tough would allow the industry to counter people who say that the FTC should be given far more power over its business practices.
  • Some consumer groups and Facebook's critics will likely complain that the settlement doesn't go far enough.

What's next: Any settlement would be a major development in the ongoing national debate over online consumer privacy — but nowhere near the end of it. Lawmakers on Capitol Hill are currently trying to hammer our legislation that would put Facebook and other tech giants under new privacy rules, but progress has been slow.

Go deeper

Federal court temporarily halts "Remain in Mexico" program

Migrant wearing a cap with U.S. flagin front of the border between Guatemala and Mexico. Photo: Jair Cabrera Torres/picture alliance via Getty Image

The 9th Circuit Court of Appeals upheld a lower court's earlier injunction on Friday, temporarily stopping the Trump administration from enforcing the Migrant Protection Protocols (MPP) — known as the "Remain in Mexico" policy.

Why it matters: Tens of thousands of migrants seeking asylum have been forced to wait out their U.S. immigration court cases across the border in Mexico under the policy. The Trump administration has long credited this program for the decline in border crossings following record highs last summer.

Go deeperArrowUpdated 2 hours ago - Politics & Policy

Coronavirus updates: WHO raises global threat level to "very high"

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

The World Health Organization raised its global risk assessment for the novel coronavirus to "very high" Friday, its highest risk level as countries struggle to contain it. Meanwhile, National Economic Council director Larry Kudlow this morning tried to reassure the markets, which continued to correct amid growing fears of a U.S. recession.

The big picture: COVID-19 has killed more than 2,860 people and infected about 83,800 others in almost 60 countries and territories outside the epicenter in mainland China. The number of new cases reported outside China now exceed those inside the country.

Go deeperArrowUpdated 3 hours ago - Health

Bernie's plan to hike taxes on some startup employees

Illustration: Sarah Grillo/Axios

Sens. Bernie Sanders (D-VT) and Chris Van Hollen (D-MD) introduced legislation that would tax nonqualified stock options at vesting, rather than at exercise, for employees making at least $130,000 per year.

The big picture: Select employees at private companies would be taxed on monies that they hadn't yet banked.