Facebook’s (FB) historic $5 billion settlement with the FTC brings to a close one of the biggest concerns hanging over the company, and imposes sweeping new restrictions on the social network designed to boost privacy protections.
But with a split 3-2 vote by the FTC commissioners, it could also reflect a fundamental divide over just how much American consumers are willing to give up in order to access services they use every day.
“The FTC really looked into it and maybe this was sort of the best they thought they could get,” John Yun, former acting deputy assistant director in the antitrust division at the FTC, told Yahoo Finance’s “The First Trade.”
FTC Commissioner Rohit Chopra, in his dissent, called portions of the deal “a giveaway,” and said that the settlement “does little” to change Facebook’s “business model or practices.” Likewise, Commissioner Rebecca Kelly Slaughter, in her dissent, called the fine “insufficient” and wanted to see the agency take Facebook to court.
Both commissioners cited ongoing questions over Facebook’s use of private data, in violation of a 2012 FTC order.
“Privacy has a very interesting role at a place like Facebook,” said Yun, a law professor and director of economic education at the Global Antitrust Institute at George Mason University’s Antonin Scalia Law School. “Users want more privacy, but when privacy results in less innovative services and less curated products, then this actually hurts not only users but also [Facebook’s] advertisers.”
The settlement also perhaps sends a message to other tech companies that the FTC and other agencies may have to walk a fine line in regulating privacy.
“It’s really not more privacy or less privacy, it’s really the right level of privacy,” Yun said.
“Facebook will obviously point to this as suggesting that they’re conforming with this order and these changes and they’re really improving their privacy policies,” he said. “And they very might well be doing that. So this consequently gives them some buffer and some protection against other investigations.”