Senators, ex-Officials Not Concerned About Timeline of FTC’s Facebook Probe
Despite consumer groups clamoring for the FTC to conclude its Facebook-Cambridge Analytica probe (see 1808160075), Senators and ex-commission officials told us the agency is taking an acceptable amount of time. “I’d rather them do it sooner rather than later, but I want them to be thorough,” said Sen. John Kennedy, R-La. He acknowledged officials in the EU and globally are waiting to see what kind of authority the agency has for regulating privacy. “That’s probably why it’s taking a while,” Kennedy said, noting that when the agency reaches a conclusion, privacy will remain an issue for social media platforms.
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“Even when they conclude their investigation, they’re not going to be conclusive after just one investigation,” said Sen. Ron Johnson, R-Wis. “This is a really complex issue we’re discussing here. We need to be concerned about this one company with a great deal of control over information that is pretty much unregulated.”
Sen. Richard Blumenthal, D-Conn., said the timeline is “justified as long as they reach the right result.” The agency needs to “finish as quickly as possible, and I think the evidence is overwhelming that the [2011 FTC consent decree with Facebook] was violated. I think that case is pretty self-evident,” Blumenthal said. The commission and company didn’t comment.
Experts said Facebook could be subject to penalties ranging from $10,000 to $40,000 per violation per day, which theoretically could amount to fines in the trillion dollar range. The U.K. Information Commissioner’s Office closed its Facebook-Cambridge Analytica investigation earlier this summer, fining Facebook a maximum amount of $663,850. FTC pacts with tech companies include: a $70 million settlement with Amazon in 2017, a $32.5 million deal with Apple in 2014 and a $22.5 million accord with Google in 2012.
Former FTC Consumer and Business Education Division Associate Director Nat Wood, vice president at PR firm Rational 360, expects one of the biggest settlements in FTC history for Facebook. But it will be a drop in the bucket financially for that platform, he said.
Wood, former Consumer Protection Bureau Chief Jessica Rich and former FTC Chief Privacy Officer Marc Groman agreed the agency is taking a reasonable amount of time, given complexity and implications. There’s an enormous amount of material, said Rich, now Consumer Reports vice president-consumer policy and mobilization. Evidence includes documents, congressional hearings and agency interviews with Facebook officials and third parties, she said. From reviewing all public materials, including Zuckerberg’s appearances on Capitol Hill (see 1804100054 and 1804110065), Rich would be “shocked” if the agency doesn’t bring a case.
Increasing the complexity is Cambridge Analytica findings could be part of a wider pattern of how the platform deals with third parties, Rich said. The social network received additional Hill backlash when third-party data agreements were revealed between Facebook and a long list of mobile device manufacturers (see 1808160075).
Wood and Groman, now an adviser at Groman Consulting Group, expect Facebook to settle. Wood wouldn’t be surprised if the FTC is conducting investigatory interviews with company officials while concurrently trying to reach a settlement, which he said would be normal for such an investigation. Most companies would want the bad publicity and high-profile allegations out of the way, Groman said.
Rich and Groman said the stakes are high for the agency, given the amount of attention. Groman and Wood described multiple layers that will need to sign off on the final decision, from staff to the bureau chiefs to the four recently appointed commissioners. That five commissioners were in the confirmation process when the investigation opened further complicates the case, Wood said. Maureen Ohlhausen will be succeeded by Christine Wilson once the former exits to become a judge, a nomination that has been held up.