Following an investigation that was sparked off by the Cambridge Analytica scandal, Facebook has been fined $5 billion by the US Federal Trade Commission (FTC) for playing fast and loose with its users and their data.
The figure is unprecedented in the US and is just under the $5.1 billion fine that Google was slapped with in Europe — the world’s least forgiving jurisdiction on privacy — for illegally leveraging its dominance with Android. The social media giant was found to have breached the conditions of a 2011 settlement and an adverse outcome was seen to be inevitable months ago.
It only remained to discuss the quantum of punishment, and with an eye-popping figure, the US government is showing its commitment to reining in Big Digital. But the question remains: Is a fine a suitable deterrent for a behemoth that earned $56 billion last year, or is it just eye candy for the public, which makes a point but does not cramp its style? It is particularly thought-provoking in the case of Facebook, which has attracted charges of a far more serious nature than its peers in Silicon Valley.
Facebook drew the censorious attention of the FTC with the illegal release of data to Cambridge Analytica, which used it for political profiling of users, and may have influenced the US election which brought Donald Trump to the White House.
What is the cost of a stolen election in the world’s most powerful democracy? What, for instance, is the global cost of the ongoing Iran crisis, which may not have developed in the hands of another government? That’s just one of the entries in an extensive bill, whose total would be mind-boggling. Could a fine be proportional, at all? And would it deter the perpetrators?
The short answer is: No. Corporate malfeasance is executed by foot-soldiers, but originates in policy that is suggested or mandated by the top leadership, whose salary, bonuses or severance packages may not be affected. In fact, if a fine is regarded as a part of the cost of revenue, it is easily ignored, and adjusted against any routine head, like the wages of the said foot-soldiers. In law, the corporation is a person, but its actions are actuated by directors.
To be effective, deterrence must fix blame where it belongs, in the upper echelons of the corporate superstructure. The strategy of fining digital giants will remain inadequate until personal liability is considered.