
If a $5B Fine Is Chump Change, How Do You Punish Facebook? - pseudolus
https://www.nytimes.com/2019/04/26/opinion/facebook-fine-ftc.html
======
zaroth
> _What does a good, meaningful fine actually look like? Would it need to wipe
> out one quarter’s revenue (roughly $15 billion)? Is a fine meaningless
> unless it’s recurring (penalties for every quarter or year since Facebook
> last settled with the F.T.C. for violating user privacy in 2011)?_

I get that people want to see a company _crippled_ but wiping out a quarter of
_revenue_ is a death-blow.

I don’t use Facebook at all, but I followed the CA scandal because I thought
it was an interesting case that Facebook predictably botched nearly every
aspect of handling it.

$5 billion is a lot of money. It is not and never can be considered “chump
change”. It is irrational to think a Board or management team isn’t going to
seriously implement rigorous changes to avoid a $5 billion dollar fine.

This is where someone says that if you can violate the law and earn $6 billion
and only be fined $5 billion you will violate the law every time.

There are numerous problems with this statement. One, you don’t know ahead of
time what the fine will be. Two, it assumes there’s no way to earn even $1 of
the $6 billion without violating the law.

If you can earn $3 billion without violating the law and double it to $6
billion with the violation, but the fine is $5 billion then it’s not “worth
it” but even still this fails to account for the tremendous reputational and
legal risks.

One parting thought. If the behavior which is being fined was directly used to
obtain a monopoly position in the marketplace which the company continues to
benefit from, that changes the calculus. But was CA’s ability to scrape social
network data from Facebook’s API a proximate cause of Facebook’s market
position?

~~~
badrabbit
Here is what you dont get,the idea is to give them a death blow.

Nobody is interested in giving FB a warning. If you ask me, prison time for
execs in addition to at least $10B yearly fine makes sense. They intentionally
did things that harmed millions of people, the idea is not to just make them
think twice before they do something like that again,but to make the message
loud and clear: "that move is a fatal move". Not just for FB but for all
others who make money out of user surveillance
(snapchat,linkedin,google,etc...). We don't want to give them a risk they can
calculate and evaluate,we want to give them a risk as clear as death, a risk
no company will even bring up in any meeting.

~~~
zaroth
Maybe I’m out of sync with what really happened with Cambridge Analytica? As I
understand it, CA scraped Facebook and retained the data in violation of
Facebook’s ToS.

This was not a secret agreement with CA, this was CA using a publically
documented API which was returning the data it was designed to return, but CA
using and retaining the data improperly.

Later Facebook decided to significantly restrict the data that apps can pull
out of their system (arguably making the system more closed and harder to
compete with, but protecting that data from misuse).

They exposed too much of the social graph through their developer APIs. I can
see an alternate universe where they are fined for exposing too little.

Like I said, I don’t use Facebook so I don’t care much about them. I don’t
think they add a lot of value in the world, but their billion plus users must
feel differently.

But I don’t understand why, on the basis of Cambridge Analytica, the company
should be fined out of existence.

You can hate Facebook, and you can not use it if you do hate it. But there are
a billion plus people who apparently don’t hate Facebook and might be damaged
by Facebook being dismantled by the government.

~~~
delusional
Facebook is a strange beast when it comes to privacy. According to themselves,
they have what amounts to hidden profiles for people who aren't part of
Facebook. In other words, they track you and try to learn about you, even if
you actively avoid them.

So you can "not use Facebook", but you can't not BE used by Facebook. Which
means you also can't dismiss them as a choice. They are imposing themselves on
you, whether you like them or not.

~~~
nostrademons
Most of the privacy-violating industry works the same way, they're just better
at keeping it out of the news. The NSA, the FBI, all 3 major credit-reporting
bureaus, any security company with CCTVs, Google, ad-trackers, 23andMe, anyone
who buys or sells your mailing address - they all keep data _about_ you
whether or not you have chosen to allow them or have any business relationship
with you at all.

~~~
6gvONxR4sf7o
It should all be shut down down. Some kind of reasonable privacy should be a
right.

------
kmlx
unpopular personal opinion: facebook is the latest scapegoat of society.
people are so much smarter than the NYT article suggests, and the so-called
“power” of facebook is mainly just a reflection of our own internal flaws. the
amplification of these flaws is actually very helpful: in order to fix them we
need them exposed loudly/boldly. and so we reach the main pain point: privacy.
since we’re extremely social animals, privacy could be considered to be anti-
human. and thus our jungian duality (another flaw) is exposed in all it’s
glory: we love to be loved, but our rational side counters our every move.
facebook is just another tool to expose our animalistic flaws. one of many.

~~~
nafey
I dont think Facebook is merely a scapegoat. In the sense that the very
existence of Facebook is threatening to the establishment. More than any other
company in US, Facebook has (or used to have considering the declining active
users) a direct connection to every citizen in the country through their
timeline. If Zuckerberg was so inclined he could have had a very strong effect
on the outcome of elections. No other corporation comes close. The closest in
this regard are the big media houses (CNN, Fox etc.) who do wield influence
but are regulated and have to compete with each other. Neither of these
limitations exist for FB as of now. Think how the government would have acted
if all the media houses merged into a single company under a slightly
misanthropic CEO who hints at political aspirations.

Secondly, FB might amplify our flaws but this is a structural issue contingent
on the very design of the newsfeed algorithm. Instead of blaming ourselves and
embarking on a nationwide self improvement campaign we can think about minor
design changes that could perhaps alleviate these effects.

~~~
existencebox
I was with your post up until the final sentence, which struck me as a
worrying enough point that I had to comment. (re: minor design changes rather
than self improvement.)

The fact that the mentality has changed from "let's improve ourselves" to
"let's legislate and limit" is part of what makes this debate so scary; this
is not a new opinion for me however, I certainly tend to fall on the side of
self-empowerment and positive (as opposed to negative) liberty in most cases
and see facebook as a lesser of MANY evils of which the population/media has
neglected. (Credit card data exchanges, NSA bulk collection, at&t room 641a,
equifax, etc. This is far from the first time I've made a similar ramble to
this)

Especially given that I tend to agree with the OP that it's a manifestation of
our "lizard brain" that's actually the vulnerability here, and that govt.
doesn't have a great history of managing these sort of things (Prohibition,
sex work laws, drug war) I'm very remiss to give them more a hand in
controlling the people.

ESPECIALLY given that, frankly, the way this is being legislated will leave
facebook with exclusive control over their graph, as opposed to democratizing
and making people aware of it. Even GDPR, for instance, will allow FB to
compute aggregate and trend statistics on the graph data, which will be
sufficiently deanonymized while preserving the bulk of the "insight" data they
and only they gleaned.

I said a lot of things here and probably undermined my own point with some of
them, but broadly, I think there's both evidence that it is a scapegoating,
and that there are major pitfalls in how we're trying to address it.

------
xtracto
That's why I think fines should be a % of some wealth value of the law
breaker.

I have always though for example that here in Mexico, traffic fines should be
a % of the "yellow book value" of your car. Say, for passing a light in red,
you get 5%. If you have a $1600 VW bug, then 5% of that will deffinitely hurt
you. Similarly, if you have a $256,000 Ferrari, 5% will still be meaningful
for you.

Otherwise, fines end up being just "the price of making business" or the price
of speeding for wealthy people.

~~~
mruts
The natural conclusion for that is that all punishment be that way. Or maybe
we should give out fines based on expected life-time income. So if you're
young, you'll get a huge fine.

Or maybe we could also hand down prison sentences like that. If you're young
and steal a candy bar we can send you to jail proportionally longer than if
you're old.

Of course none of this makes sense, and fines based on your income is a
terrible, awful idea.

~~~
fwip
Why is it an awful idea?

Fines are meant as a deterrent. Flat fines are either devastating for poor
people or meaningless to rich people, or both.

Fines that scale with income or wealth allow reasonable deterrents to rich and
poor people alike.

~~~
AnthonyMouse
> Fines are meant as a deterrent.

No they're not. They're meant as a price. If they were meant as an
unconditional deterrent then the penalty for everything should be death plus
all of your assets.

That would maximize deterrence (and require us to be a lot more careful about
what we pass laws against), but that's not what we're really after.

What we're trying to do is to keep the bad thing at a manageable level, which
is exactly what proportionate penalties do, especially fines.

There are only a few crimes where the most important thing is deterrence, but
those are the things we don't use fines for to begin with. For example, there
is no fine for murder, the penalty _is_ death, or life in prison, because we
really are out to maximize deterrence there.

For everything else, if the fine is set appropriately then the cost to society
of someone violating the law is less than the amount of the fine times the
probability of being caught. If you then want to pay the price to do the
thing, great -- we'll take your money and use it to save some lives somewhere
else or do some other socially beneficial thing, and since you're paying more
than the cost of the damage you're doing, everybody comes out ahead.

And if the fine _isn 't_ high enough to pay for the damage being done then it
should be higher for _everyone_.

~~~
fwip
Why is it fair that rich people should be able to afford breaking the rules of
our society but poor people not?

~~~
AnthonyMouse
Why is it fair that rich people should be able to afford a Ferrari but poor
people not? Why is it fair that rich people should be able to afford a house
in the Hamptons but poor people not?

Because things cost money and if you want indulgences you have to pay for
them.

~~~
fwip
Okay, so your stance is "indulgences are good."

~~~
AnthonyMouse
How are they not good? The reason we have rules is that breaking the rules has
costs to society. When the value of breaking the rule is worth more to you
than the cost to society, it's a net beneficial transaction on both sides to
let you do it in exchange for a premium.

The only way it's a problem is when the value is set wrong, so that you're
only paying $100 but causing $1000 in damage. But that's not the fault of the
premise of pricing damage, it's the general problem with corruption or
government inefficiency. And the alternative is that the corruption causes you
to be able to do $1000 in damage and pay nothing because the whole thing is
swept under the table -- at least this way it's happening in the open and the
public can evaluate whether the price is appropriate.

~~~
perl4ever
"The reason we have rules is that breaking the rules has costs to society.
When the value of breaking the rule is worth more to you than the cost to
society,"

What if the harm to society of a rich person breaking a law is more than the
harm of a poor person breaking that law? The positive actions a person does
may be magnified by wealth; why wouldn't the negative actions be?

------
Glyptodon
Force a 1:3 stock split on all non-gov owned shares for all ownership classes
with 1 out of 3 of the split shares going to the government every time a big
publicly traded company ignores or breaks rules on a large scale.

Publicly traded companies are supposed to be responsive to shareholder
concerns, and shareholders would be terrified of penalties denominated in
stock. Pittance dollar bill fines are unlikely to ever work because finding a
"just right" size is too difficult.

~~~
edgan
This would just make the government invested in the status quo just like
investors, or all the sharks would get into office to vacuum up the companies
for power.

------
fyoving
Saying that $5 billion is "chump change" is silly in any context and on a
related note I keep hearing newscasters and prodcasters bemoaning the fact
that Facebook is thriving and it disturbs me to no end that these people are
publicly and loudly advocating for an important and unique company to be
killed off, and I'm not sure about the psychology or the motives behind it.

What's clear is that they are blaming facebook for political outcomes that are
divergent from the mainstream and are conflating that with all that is
negative and upsetting in the zeitgeist

~~~
wutbrodo
As with doctors, journalism has an aura around it of being populated solely by
noble, honest, and impartial folk. Unlike doctors, there's far less-buyin to
this mythos from people not working in the industry, but it still exists:
think about how many people you know whose "beliefs" consist largely of
uncritically repetition of takes from the handful of publications that they
have chosen to trust deeply.

In reality, any industry populated by humans (perhaps excluding those with
extreme barriers to entry) is going to have people on most points of the
spectrums of stupidity/intelligence and honesty/dishonesty. There's no bar
that means you have to be particularly smart or intellectually honest to be a
journalist.

The upshot of this is that when you see issues that systemically[1] affect an
entire industry, you can expect to see this bias to a pretty blatant degree. A
banal example is that of Google Reader: its loss was perhaps worth bemoaning,
but the sustained hysteria from the media was insane (hilariously, this was
around the same time they were pronouncing Google+ as dead, despite it having
a multiple of in-stream DAU compared to Google Reader).

So, to finally get to my point: the upheavals that the media industry has been
going through the past decade is (fairly) blamed on tech and (perhaps less
fairly) personified by large tech companies. That doesn't mean dismissing any
criticism of tech, as there are plenty of valid ones, but reading coverage
critically is always valuable, and particularly so on topics where they have
an incentive (emotional or otherwise) to dissemble.

[1] or even statistically: the claims of both pro-Democrat and pro-corporate
bias in large media are IMO exaggerated but are also likely true to at least
some degree: they're an unavoidable consequence of the industry being heavily
skewed towards people/entities identifying as Democrats working for/being
large corporations.

------
rjf72
By creating competition.

And that can be done easily. The reason it's impossible to compete against
Facebook is because of the network effect. Kill the network effect. If you
have a site with more than let's say 100 million active users you are required
to license free user generated content (such as posts) under a copy-left
license, unless the user _opts in_ to a restrictive license on a per content
piece. All content, opt in or out out, must regardless be treated the same by
the site - no incentivizing people into opting in by effectively punishing
those that don't.

And furthermore require that the site provides both an API for accessing all
published content, as well as remotely publishing by users. You've now not
only 'punished' facebook, but really fixed a huge chunk of the entire tech
industry's problems by killing the network effect. Now competitors can create
their own alternatives that users from e.g. Facebook can use and even keep and
interact with all of their friends on. With no network effect, it's now simply
a competition to see who can provide the best user experience.

~~~
rock_hard
FB has offered such API for almost a decade already

------
radicalbyte
You add a 0 to the fine then move on to the fantastically profitable companies
who are doing exponentially worse things than Facebook (Exxon Mobil, Shell, BP
et al).

~~~
ianai
That’s still not enough. Require FB adhere to the same regulations as other
media. The stuff that requires political ads disclose who paid for them. Maybe
there need to be clearing houses for ad campaigns. Impose regulations that
require governmental vetting/oversight. Tax data use. Novel regulations to
bring FB to parity with the rest of media. Maybe put a tax on the time and
data people share with FB services. Force disclosure of the per hour/view/use,
per person revenue of their services.

~~~
rock_hard
You realize that FB already does all these things, right?

~~~
ianai
Nope

------
basetop
Isn't this just a rehash of

[https://news.ycombinator.com/item?id=19759490](https://news.ycombinator.com/item?id=19759490)

I wish one day real journalists will look into how the "anti-facebook" media
blitz happened. I've never used facebook and I hate the idea of facebook, but
the politically motivated attacks that seem to stem from the highest level of
governments ( across the atlantic as well ) and amongst the media need real
investigating.

At this point, it isn't objective reporting, it's ideological advocacy
grounded in political motivation. From zuckerburg and sandberg being accused
of being antisemites ( when they themselves are jews ) to facebook being
blamed for everything under the sun, one has to wonder what the hell is going
on. There definitely is a story here, but it isn't facebook, it's the media. I
doubt Mao's propaganda against the bourgeois was as relentless.

~~~
__m
Yeah an investigation is needed, what is this privacy thing they are talking
about? And why would politicians care about that? Which company is lobbying
them to care about their voter‘s rights?

~~~
basetop
These news organizations and politicians care so much about privacy that they
all have facebook accounts? I've never had a facebook and never will. I care
about privacy. I don't think they do. So that leaves me wondering what they
really care about.

Also, facebook and news companies are both in the same business - the ad
selling business which is the cause of the privacy issue.

But that's not my concern. My concern is the obvious politically motivated
move against one company and one industry by politicians, government agencies
and news companies. When people start calling zuckerburg and sandberg ( who
was hailed as a female hero by the media for many years until recently )
antisemites, you have to start asking question. No?

Don't you think it is odd that news companies ( who are supposed to be
objective and report the news ) are advocating for fines? Shouldn't a news
company simply report the fine rather than demanding more fine? Where's the
objectivity? Shouldn't journalists report what is happening rather than
advocating for something to happen?

I'm for reporting on facebook and privacy. It's an important issue for sure.
What I also want is reporting on the reporting itself because that seems to be
an even bigger story. I may not be the sharpest tool in the shed, but even I
can see that there is more than reporting and news involved here.

And it's hard to take the news concerns about privacy seriously when they are
all demanding preferential treatment on facebook's platform. Why don't the
nytimes close their facebook account? Why don't they pull their headlines from
facebook rather than demanding facebook prominently display their headlines
and give their headlines top billing? When their words and actions don't
align, it makes me wonder. I'm always wondering.

------
chadwilken
Add 1000ms to all of their requests

------
amelius
> How Do You Punish Facebook?

You make Facebook and all social media content fall under the
telecommunications act. This would mean that FB would lose its network effect
(other parties would be able to provide services that interact with users on
FB; just like telephone users can call eachother even when they are on a
different network).

------
AnthonyMouse
Antitrust has had solutions to this forever. When a business misbehaves, the
government settles by entering into a consent decree that involves government
lawyers crawling inside the company and laying their eggs. Then they live in
there for a number of years. They get lots of information about what the
company is doing, as it's happening, and can put a stop to stupid nonsense
before it happens instead of trying to punish it after the fact. They can also
require the company to do things to mitigate the damage, like not collecting
or retaining information unnecessarily.

In general, do things that aren't cost effective or efficient for companies
that _haven 't_ misbehaved but make a very effective combination of punishment
and reform.

But that's assuming the goal is actually reform rather than just lining
government coffers.

------
jellicle
Add another zero? Or maybe two?

I mean, here's the thing. If you spit on the sidewalk or look funny at a cop,
you can spend months in jail. Facebook is doing some bad stuff to a whole lot
of people, all the time, flaunting the law, without remorse and repeatedly.
There is absolutely no reason why considerations like "we must make sure
Facebook survives as a going, profitable entity" should enter into punishment
considerations, any more than "we should make sure this guy's life isn't
harmed" enters into our punishment considerations for some guy walking down
the street with two joints in his pocket.

------
gesman
Governments are not really interested to “punish” FB as long as they can
regularly “milk” FB for fines.

Cost of doing business for large international corps.

------
leke
Take the 5 billion, give it to a decentralised opensource FB clone project.
Same about 100 million for a global advertising campaign.

~~~
djohnston
social networks with a lot more capital have tried and failed. it's the
network effect and the inertia of migrating that keep people on the network,
not the lack of a "fbclone"

~~~
AnthonyMouse
The other social networks with that amount of capital were trying to be
Facebook, i.e. another closed network that they can profit from. Facebook just
under a different name has no relative user advantage and no reason for users
to switch.

An actual decentralized network has different requirements and can thereby
attract users by having different characteristic advantages.

For example, one of the large and growing problems with centralized networks
is that everybody leans on them to do censorship, and they have insufficient
stake in protecting individual speakers, even against unreasonable or
blatantly fraudulent censorship requests.

If you make it trivially easy and inexpensive for anyone to self-host then the
person making the censorship decision is the person whose content it is to
begin with, which brings back the proper alignment of incentives regarding
cost of removing content vs. liability for hosting it.

And that's just one advantage. Another is you control your data instead of
Facebook and it's only you and your own friends who have access to it, not
some corporation using it to run adversarial machine learning against you.
Another is that your data is local and is therefore faster and available in
places with poor internet. Another is that you have access to it yourself and
can make modifications to both code and data, and then you get improvements
from everyone instead of being restricted to a single company with a conflict
of interest.

These kinds of things add up, but first you need somebody to spend the
resources to develop it into something that non-experts can easily use and
understand. Which is already happening, slowly, but would happen much faster
with those kinds of resources.

------
HenryBemis
How do you eat an elephant? One bite at a time. Someone please serve them a
$€£5bn penalty. And actually collect the FULL amount. 6 months later, on the
next ...... they make, drop another $€£10bn on their heads. And yes you
guessed right, collect it. Then 6 months later on the next ..... they make,
'award' them with one more $€£10bn penalty. By that time they will be bleeding
so much cash and users that they will either get their shit straight or they
will go out of business.

Unfortunately I don't see any other way for those thugs (FB) to come clean.

------
SpikeDad
Simple. Big federal prison terms for the CEOs and top executives.

------
username223
I liked the idea of making them delete their data and start over under strict
supervision. They've proven themselves incompetent at handling personal data,
so they need to be supervised when they do. It will never happen, but one can
dream...

More realistically, the board and executives should be personally liable for a
fraction of their wealth. Fine Zuckerberg and Sandberg 10% of their hoards,
and things will change.

------
new_guy
They're starting from a false premise. The idea isn't to 'punish' Facebook,
the people fining them really couldn't care less.

What they want is to line their own pockets, they do that by fining them in a
way the stupid uneducated public supports.

The real way to 'punish' Facebook would be to hold Zuck directly accountable.
i.e he personally faces jail time unless he does x,y and z etc.

------
xfitm3
What about forcing Facebook to shut down and redirect all traffic to a page
detailing what Facebook has done to earn itself this position? Throw in some
awareness of social media addiction and how it can negatively impact lives.

------
vijaybritto
A short ban would be a great way! They say that they make free speech
available for everyone but intern they use free speech and make a tonne of
money. Also turning us on one another by letting fascists reach everyone
easily!

------
return1
Well an easy way is for all the big US media publications to move their HQs in
the EU, then make facebook pay every time their links are being shared. Sounds
like a shrewd decision they can make today.

------
diogenescynic
Jail Zuckerberg. The buck stops with him. He should be personally liable.

------
arbie
Facebook didn't happen to society. The internet happened to society.

------
GrumpyNl
The only punishment that will work is where the people will be held
responsible and criminal law will be indicted, otherwise, its just money.

------
adrenalinelol
Not to be crass... but how about multiple the fine by 10 if one believes it's
not punitive enough?

------
carrja99
By breaking it up and regulating it

------
opnitro
Easy, put executives in jail.

------
Jemm
Raise their tax rate and keep raising it.

------
natch
Blackhole their ad servers.

------
Havoc
Add a zero?

------
mgarfias
corporate death penalty

------
lelf
$50B fine.

------
patrickg_zill
Nothing changes until people start to go to jail.

