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FTC Imposes $5B Penalty and Sweeping New Privacy Restrictions on Facebook

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Re: FTC Imposes $5B Penalty and Sweeping New Privacy Restrictions on Facebook

#31

Post by eitland »

throwaway2048 wrote: post #19
b_tterc_p wrote: post #14

I get that fines don’t always offset the benefit gained from shady practice, but frankly I don’t think Facebook got $5B from this. That’s ~25% of last year’s net income. That’s a punch in the jaw.

Considering their stock rose significantly after this fine was announced, I don't think the people making money from Facebook agree with you.

Given my relationship with Facebook I want to agree and say the fines are way to small, but for what I know it could also be that they hurt badly and the reasons the stock rose was just because the stock marked had priced in an even bigger fine.

Edit: yep, lots of them.

Re: FTC Imposes $5B Penalty and Sweeping New Privacy Restrictions on Facebook

#32

Post by dhbanes »

watwatinthewat wrote: post #26

I don't think I agree with Facebook getting a bigger fine than Equifax. I put my own information on FB. Equifax compiled information on me without my explicit consent. Both sets of data got into hands they shouldn't. I realize that misses FB willfully doing what they did and Equifax not intending to be hacked, but for me my consent is equal or more important than what the holders of the data did after they had it. Le…

Facebook generates a shadow profile on you without your consent.

Re: FTC Imposes $5B Penalty and Sweeping New Privacy Restrictions on Facebook

#33

Post by morley »

jawns wrote: post #8

A lot of the terms of the settlement deal with organizational changes, but when you look at the very specific privacy restrictions that Facebook agreed to, it's really, really problematic stuff: * Facebook is prohibited from using telephone numbers obtained to enable a security feature (e.g., two-factor authentication) for advertising; * Facebook must provide clear and conspicuous notice of its use of facial recognit…

Some of the organizational changes are substantial. Having an independent privacy force review all existing and new product features for privacy implications can be a huge drain on velocity, especially if they demand a lot of changes.

But really, this is how organizations should be run: there should be a user-privacy-focused resource inside the company that can work with product to guide how features get implemented. (The same goes for accessibility, technical feasibility, and other things that product people aren't necessarily measured against.)

Re: FTC Imposes $5B Penalty and Sweeping New Privacy Restrictions on Facebook

#34

Post by InTheArena »

"Facebook CEO Mark Zuckerberg and designated compliance officers must independently submit to the FTC quarterly certifications that the company is in compliance with the privacy program mandated by the order, as well as an annual certification that the company is in overall compliance with the order. Any false certification will subject them to individual civil and criminal penalties."

This is actually the big thing here. Any disclosure or breaking of the data makes Mark Zuckerberg personally liable.

We'll see if that gets Facebook's attention at all.

Re: FTC Imposes $5B Penalty and Sweeping New Privacy Restrictions on Facebook

#36

Post by vikramkr »

throwaway2048 wrote: post #20
vikramkr wrote: post #12

Earlier quoted context omitted.

This is not a sustainable amount to be fined. I think they made a net income around 20 billion last year, this a quarter of that. A couple more of these fines and that's a really dangerous situation - companies at Facebook's stage are valued on multiples of earnings with growth, not revenues, and 75 to 50 percent reduction in earnings wiped a lot of shareholder value off the table, meaning the shareholders (basically…

Except it didn't whipe a lot of shareholder value off the table, the stock rose by 5% after fines were announced. Zuck himself made a cool billion off the bump.

News like this is already priced in and the market reaction is an irrational mix of random expectations. Some would have thought it would be more, some will think that this the end of Facebook's regulatory troubles, some will think that people overreacted over the last few days and are buying now that the uncertainty of the fine is gone and we know how the settlement stands. If this was a surprise 5 billion, then the stock would have dropped by way more than the 25% you might expect because of panic. You also have the growth story.

A good way to put it is that the stock price would not have changed by more than a few percent today anyway, but in a world with no fine the starting price would have been higher. And in a world where we see more and more 5 billion dollar fines, they'll be less and less shrugged off as one offs even without increasing penalties.

Re: FTC Imposes $5B Penalty and Sweeping New Privacy Restrictions on Facebook

#37

Post by jakear »

throwaway2048 wrote: post #20
vikramkr wrote: post #12

Earlier quoted context omitted.

This is not a sustainable amount to be fined. I think they made a net income around 20 billion last year, this a quarter of that. A couple more of these fines and that's a really dangerous situation - companies at Facebook's stage are valued on multiples of earnings with growth, not revenues, and 75 to 50 percent reduction in earnings wiped a lot of shareholder value off the table, meaning the shareholders (basically…

Except it didn't whipe a lot of shareholder value off the table, the stock rose by 5% after fines were announced. Zuck himself made a cool billion off the bump.

That fines were coming was known, and reflected in the stock already. The announcement reduced uncertainty, causing value to rise.

Re: FTC Imposes $5B Penalty and Sweeping New Privacy Restrictions on Facebook

#39

Post by apocalyptic0n3 »

maxerickson wrote: post #27
jawns wrote: post #8

A lot of the terms of the settlement deal with organizational changes, but when you look at the very specific privacy restrictions that Facebook agreed to, it's really, really problematic stuff: * Facebook is prohibited from using telephone numbers obtained to enable a security feature (e.g., two-factor authentication) for advertising; * Facebook must provide clear and conspicuous notice of its use of facial recognit…

There's the pesky implication that Facebook was perhaps doing all that stuff. Making them stop is a win for users.

It definitely was.

- Asking for email password: https://arstechnica.com/information-technology/2019/04/faceb...

- Targeting ads using phone numbers obtained through two-factor authentication: https://www.engadget.com/2018/09/28/facebook-two-factor-phon...

- Improper use of facial recognition: https://www.npr.org/sections/thetwo-way/2018/04/16/603056662...

Re: FTC Imposes $5B Penalty and Sweeping New Privacy Restrictions on Facebook

#40

Post by firebird84 »

throwaway2048 wrote: post #20
vikramkr wrote: post #12

Earlier quoted context omitted.

This is not a sustainable amount to be fined. I think they made a net income around 20 billion last year, this a quarter of that. A couple more of these fines and that's a really dangerous situation - companies at Facebook's stage are valued on multiples of earnings with growth, not revenues, and 75 to 50 percent reduction in earnings wiped a lot of shareholder value off the table, meaning the shareholders (basically…

Except it didn't whipe a lot of shareholder value off the table, the stock rose by 5% after fines were announced. Zuck himself made a cool billion off the bump.

A larger fine was priced in because investors were uncertain of earlier estimates of the fine being accurate. When the settlement news was announced, the stock bumped because it was better than expectations.
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