The $3 billion penalty: Is Facebook officially too big to nail?
The unprecedented fine will amount to just $1.26 penalty per its 2.38 billion monthly active users - pocket change for FB.
Late last week, news broke that the Federal Trade Commission (FTC, the American agency tasked with protecting consumer interest) was getting serious about making Facebook pay for its role in the Cambridge Analytica scandal. According to the revelations made by the world's largest social media platform, it expects to cough up between $3 billion and $5 billion in penalties for its privacy lapses.
That amount will be a record penalty imposed by the FTC on a tech firm (by a factor of at least 100) but, unfortunately, it will be nowhere near enough to reform the repeat offender that the teenaged FB has grown into. With the information of up to 87 million FB users compromised as part of that scandal, a $3B fine will mean a $34.5 penalty per affected user and $1.26 per its 2.38 billion monthly active users - pocket change for FB.
Trouble is that the Mark Zuckerberg-led FB refuses to let privacy concerns stand in the way of a profit and/or popularity proposition - and this has been the case ever since Zuckerberg founded TheFacebook in February 2004.
In fact, this was the case even before Zuckerberg founded FB. In November 2003, Zuckerberg was forced to take down Facemash (the prequel to FB) hours after launching it because of the outrage it engendered among his Harvard peers. That site - based on ID pictures that Zuckerberg sourced by hacking into the Harvard database - asked visitors to vote for the 'hotter' of two randomly thrown up images and rank House students based on their looks.
That's when Zuckerberg tendered his first public apology: "I don't see how it can go back online. Issues about violating people's privacy don't seem to be surmountable. The primary concern is hurting people's feelings," he said in an interview with The Harvard Crimson.
Zuckerberg has publicly apologised for FB's follies (primarily privacy-related) on dozens of occasions since then, promising to rectify the repeated breach of trust. FB even used full-page print advertisements in the aftermath of the Cambridge Analytica scandal to drive home the message that it has "a responsibility to protect your information. If we can't, we don't deserve it."
But it seems that, right from his early Harvard days and up until now, Zuckerberg believes that the act of hacking into people's profiles, sharing their data and violating their privacy are surmountable concerns - issues that can be fixed by an apology or few, and now penalties and fines that can be listed as business or legal expense in its ever-ballooning balance-sheet.
For the record, FB has already set aside $3 billion as 'legal expense' in the latest quarterly financial results while reporting a $3.1 billion increase in quarterly revenues (y-o-y) to over $15 billion, and net profits of almost $2.5 billion. In a statement issued as part of the financials press release, Zuckerberg said: "We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the Internet."
Investors cheered the news and FB's market capitalisation surged by $40 billion in after-market trade. Putting that $3-billion fine in perspective, it may be time to acknowledge that FB may have already become too big to nail by one country or agency. It is time countries take collective and concrete actions against such repeat (and wilful) offenders to force them to mend their ways and stop the indiscretions with the personal information of their users.