
Put Another Zero on Facebook’s Fine. Then We Can Talk - juokaz
https://www.nytimes.com/2019/04/25/opinion/facebook-fine.html
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tptacek
You can get a parking ticket practically every day and continue living your
life as usual (ask me how I know).

It does not seem at all clear to me that any tech company could sustain
routine fines of this scale and remain a going concern. By Swisher's numbers
in this post, 3 more fines of this size would deplete Facebook's cash
reserves. A $5B fine represents most of the valuation of Slack, and an integer
multiple of Discord, or any of a number of other "unicorn" companies Facebook
could have bought, rather than shoveling that cash, in effect, into a furnace.

It's also not clear what the underlying violations of the consent decree are.
What this analysis loses sight of is that the deterrence question isn't simply
about what it would take to stagger Facebook as a company, but rather what it
would take to deter them from _the particular violations they 're charged
with_. If this is about lax controls over data exposed in Facebook's API
(generalizing from the Cambridge Analytica scandal), what's our guess as to
how much money Facebook made by allowing partners to do that, or how much
money they saved by not building and managing better controls? It seems
unlikely to be an amount denominated in billions.

A company can be a goliath with hundreds of billions in reserve, but if a
group inside that company that generates just tens or hundreds of millions of
dollars reliably generates 5 billion dollar fines, that group is getting
"reorganized".

~~~
kristianc
The debate has lost sight of even 'how can we punish Facebook for CA' and
moved into 'how can we punish Facebook simply for being Facebook'.

At that point, there's no need to tie the figure to anything - someone could
(and probably will) come along and say 'make the fine 500bn instead' and it
will have just as much basis in reality.

Which is fine - many do think that the world without Facebook in it would be a
better place. But this is certainly not about ‘how can we coerce Facebook into
being a more responsible actor’.

~~~
notacoward
> how can we punish Facebook simply for being Facebook

Exactly. Let's pursue the idea of fines big enough to cripple a company. Why
stop at Facebook? Couldn't you apply the same policy arguments to the banks
that brought us the housing crisis, to the pharmaceutical companies that
brought us the opioid crisis, to oil companies, tobacco companies, and so on?
Why _didn 't_ the people calling for Facebook's death by fine make the same
arguments in these other cases? Because they don't really believe in this as a
general policy. It's _stupid_ as a general policy. It puts the government in
charge of picking winners and losers, and even as a pretty extreme leftist I
don't think that's right.

Regulation should be _general_ , not targeted to favor or punish one company,
and I think proponents of a "kill the company" fine know that. They just want
to kill Facebook, and a fine is just the tool that comes to hand. It's
dishonest, and it's bad general policy. People who truly care about privacy
would be proposing regulations and fines that can apply to _anyone_ , not just
to their self-chosen nemesis.

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Despegar
>Why didn't the people calling for Facebook's death by fine make the same
arguments in these other cases? Because they don't really believe in this as a
general policy.

This is complete nonsense and shows you weren't paying attention or have
forgotten what happened after the GFC. The big criticism of the Obama
administration to this day from the left is that no bankers were put in jail.
The Tea Party movement was a right wing reaction to the bank bailouts.

At least the GFC gave us Dodd-Frank. I'm hoping for a GDPR clone to come out
of the tech industry's GFC.

~~~
notacoward
> This is complete nonsense

Please read the site guidelines.

> This is complete nonsense and shows you weren't paying attention or have
> forgotten what happened after the GFC.

We're not talking about jail, though that's an interesting conversation to
have. We're talking about fines big enough to put a company out of business.
What banks went out of business because of government action? What
pharmaceutical companies? What tobacco companies. I'll bet I was paying _much_
closer attention than you, and I didn't see anywhere this level of "add
another zero" hysteria then. Even people who didn't totally agree with "too
big to fail" seemed to agree with enough of it to stop short of where they are
now regarding Facebook.

> I'm hoping for a GDPR clone to come out of the tech industry's GFC

So am I. It just has to be _general_ regulation that can be enforced fairly on
anyone who transgresses, not a targeted hit against the pundits' favorite
target.

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throwaway_9168
Why does everyone talk about increasing fines? Wouldn't it be a far more
effective deterrent to charge some FB exec team for breaking some law (haven't
they already done that in the "friendly fraud" case?) and put them in jail?

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JudgeWapner
the main point of a corporation is a shield of liability. both morally and
legally. In a corporation, nothing is anybody's fault. Everyone, even up to
the CEO, is a process that runs a script commonly called a _policy_. So you
can't even be a member of the corporation without "following policy". But
following policy shields you from any blame or accusation of wrongdoing,
because it is always acceptable to say "wasn't our choice we were just
following policy". The policy just comes out of nowhere. Nobody puts their
name on the policy and says "This is what you do because I say so". So you can
never track down who created the policy. It was created by people, but those
people quickly disbanded and are not traceable to its inception. The CEO has a
policy which is simply a contract to "shareholders". But not any individual
shareholder, even "the board" isn't accountable, because they "represent" the
"millions of shareholders". So no, it wasn't their idea. And you can't hold
millions of people responsible. So no, there is no such thing as holding a
corporation responsible.

~~~
mpweiher
> the main point of a corporation is a shield of liability.

Of the _shareholders_. Not the executives.

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sandworm101
Being fined /= paying a fine.

I would be interested to hear exactly how much is handed over at the end of
the day. How much is forgiven? How much can they deduct from their taxes
somewhere else? How much is quietly renegotiated a couple years after the
headlines disappear.

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paulcole
Serious question: Has there EVER been a case where a fine has been truly
damaging/punitive to a company? Every instance I remember seems to be of the
parking ticket variety.

~~~
javagram
When the government wants to destroy a company they have a mechanism for it.
[https://en.m.wikipedia.org/wiki/Judicial_dissolution](https://en.m.wikipedia.org/wiki/Judicial_dissolution)

Edit: Arthur Andersen, for instance, was convicted of a crime and had to
surrender its CPA license, putting the company out of business.

Fines are just supposed to change behavior. $3 billion is a lot of money
regardless, and it’s likely Facebook will invest additional resources in the
future to help avoid future such fines.

~~~
thaumasiotes
> Arthur Andersen, for instance, was convicted of a crime and had to surrender
> its CPA license, putting the company out of business.

It was my understanding that Arthur Andersen went out of business as soon as
it was indicted, such that there was no point in actually convicting it. And
that that experience mostly defeated the purpose of having that process exist,
since it isn't appropriate to kill a company without showing that it did
anything wrong.

~~~
javagram
According to Wikipedia the firm wasn’t completely put out of business until
the conviction. I don’t know how accurate that is.

They did win a unanimous ruling on appeal to the Supreme Court years later but
by then it was too late to save the company.

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lazyjones
At this point we might just as well introduce a hefty "privacy violation tax"
(though with an euphemistic name) and treat FAANG as the new tobacco industry.
Because these kinds of issues will never go away, they are firmly woven into
these corporations' business models. Fines can't change that.

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soup10
Not a fan of facebook but $5B is a big fine, NYTimes hosting multiple OP EDs
claiming its not is disingenuous shilling more about them seeing FB as a
competitor for advertising dollars and news.

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braythwayt
That’s like saying that $5,000 is a big fine. If you make $50,000 a year or
less before tax, $5,000 is hefty. If you make $20,000 a year or less before
tax, and have no savings, it will probably bankrupt you. iIf you don’t have
any significant income, you will probably never pay it off.

But if you make $200,000 a year, it’s depriving you of a new carbon-fibre
gravel race bike this season. Annoying, but you can handle it.

“Big” is relative to your financial situation. For Facebook, it’s a parking
ticket. For a startup, it would destroy them.

~~~
tptacek
This analysis doesn't make any sense, because it's not connected to the
offense. I can laugh off a speeding ticket, but that same ticket could throw
the monthly finances of a low-income person into disarray. But we don't scale
the fine with offender income; we scale it with how fast we're driving.

It seems to me that what's important is that the fine is big _relative to the
offense_. If Facebook generated $5B from the behavior they're being fined for,
it's not a big fine. If they generated $100MM from it, it's a huge fine.

~~~
jfk13
> But we don't scale the fine with offender income

Perhaps we should. I believe some countries do.

~~~
germinalphrase
The Swiss do it. They charged a wealthy repeat offender 300k for going 85mph
in a 35mph zone.

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return1
Well that money would partially fund the NSA, so it evens out a bit

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whynyc
This fine-as-tax trend is worrying. I propose crypto burn instead. It hurts
the wrongdoer while not creating bad incentive for regulators. Win-Win.

~~~
cowpig
What does "crypto burn" mean?

~~~
whynyc
Transfering money to unspendable address. For example, $11M in
1CounterpartyXXXXXXXXXXXXXXXUWLpVr are unspendable.

[https://www.blockchain.com/btc/address/1CounterpartyXXXXXXXX...](https://www.blockchain.com/btc/address/1CounterpartyXXXXXXXXXXXXXXXUWLpVr)

