What the FTC’s $5 billion fine really means for Facebook | TECH(feed)
Hey everyone welcome back to tech feed, i’m juliet beauchamp. Yes, we are back after a bit of a break–hope you didn’t miss me too much. Today let’s talk about the giant fine facebook might have to pay and what it will mean for its future. Stick around.
Last friday the federal trade commission here in the united states approved a fine of about 5 billion dollar against facebook. This is–by far–the largest fine the u-s government has ever issued against a tech company. This is at a time where over in europe, the e-u is fining tech companies for mishandling data and privacy violations quite often. And that’s also the reason for this giant facebook fine–it’s the result of the f-t-c’s investigation following the cambridge analytica scandal.
So yeah, to normal people a 5 billion dollar fine seems like a lot. And even though it isn’t set in stone yet–it still has to be approved by the justice department–it’s extremely likely it’ll go through. But this fine and the f-t-c’s decision will likely leave facebook unscathed. Here’s why.
Facebook’s annual revenue is 56 billion dollars. Last quarter, it reported about 15 billion in revenue. And facebook has about 40 billion dollars cash on hand. A 5 billion dollar fine–equivalent to one month’s revenue–will hardly make a dent in the social giant’s finances. What would really force change in the company is if this fine came with some sort of data privacy order–or it forced facebook to change its privacy practices in a meaningful way. There’s still no hard limits on sharing user data with third parties. And as a reminder, that’s kind of how facebook got into this mess. Third parties collected data through facebook users’ accounts, mostly without their consent. And while facebook agreed to better data privacy oversight, this decision and fine does little to force facebook to change.
So this fine leaves facebook… pretty much in the same place. But around the globe, other countries have passed or are considering laws to limit the power of big tech companies. And of course there’s the european union, which is beginning mount an antitrust investigation against facebook. And facebook even faces calls for antitrust regulation at home in the united states. I mean, even facebook’s co-founder–who has since left the company–has suggested breaking up facebook. At the very least, this f-t-c fine shows the u-s isn’t afraid to crack down on tech companies in some way, and it may open the door to further regulation.
Thanks for watching this episode of tech feed. If you liked this video be sure to give it a thumbs up and subscribe to our channel. Let me know how you feel about this decision–too much? Not enough? What do you wish governments would do about big tech companies? See you next time.
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