Facebook Faces a Big Penalty, but Regulators Are Split Over How Big

WASHINGTON — Facebook’s announcement in late April that it had put aside $Three billion to $5 billion to settle claims that it mishandled customers’ private knowledge prompt a robust consensus by federal regulators that the social media large wanted to be held accountable.

But the truth behind the scenes on the Federal Trade Commission is way extra sophisticated, reflecting the politics and give-and-take of the negotiations.

The F.T.C.’s 5 commissioners agreed months in the past that they needed to pursue a historic penalty that may present the company’s tooth. But now, the members are cut up on the scale and scope of the tech firm’s punishment, based on three folks with information of the talks who spoke on the situation of anonymity.

The division is complicating the ultimate days of the talks.

Along with disagreement concerning the applicable monetary penalty, one of the vital contentious undercurrents all through the negotiations has been the diploma to which Mark Zuckerberg, Facebook’s chief government, needs to be held personally accountable for any violation of a 2011 settlement, based on two of the folks.

Facebook has put up a fierce combat, saying Mr. Zuckerberg shouldn’t be held legally accountable for the actions of all 35,000 of his staff.

The talks might crumble, but negotiations are transferring ahead and are anticipated to conclude inside days, with an announcement made quickly after. This account of the F.T.C.’s investigation of Facebook is predicated on interviews with a half dozen folks.

Joseph J. Simons, the fee’s Republican chairman, appeared to have the votes of the opposite two Republican commissioners, giving him the three wanted to approve a deal. But a Three-to-2 resolution alongside celebration traces, which Mr. Simons has mentioned he needs to keep away from, might result in robust rebukes on Capitol Hill.

The stakes are monumental for the company and Mr. Simons. The case is being intently watched globally as a litmus take a look at on how the United States authorities will police the nation’s tech giants.

The fee has a repute of pulling some punches, notably in distinction with regulators in Europe, who’ve pursued forceful motion on each privateness and antitrust points. The largest F.T.C. tremendous in opposition to a tech firm was $22.5 million against Google in 2012, for misleading users about how some of its tools were tracking them.

Any settlement will also be looked at as a measure of the Trump administration’s willingness to penalize one of the country’s most valuable and influential companies. The administration has whittled away regulations in many industries, but President Trump has repeatedly said tech giants like Facebook and Amazon have too much power.

Many Democrats have led efforts to rein in Silicon Valley’s power.

“This is a hugely important decision because it will be watched by all these big companies to see if there is actually going to be a new day on the enforcement front,” said Senator Ron Wyden, an Oregon Democrat who has pushed for Mr. Zuckerberg to be held personally liable in any settlement.

Rohit Chopra, one of the two Democrats on the commission, has publicly urged stronger punishment of repeated offenders of F.T.C. rules.

But Mr. Simons has appeared unwilling to force the issue and drag the case to court, which could be a risky move. He has recently intensified his efforts to get at least one of the two Democrats on his side, according to one of the people with knowledge of the talks. But the internal disagreements have held up a final agreement.

In addition to the fine, Facebook has agreed, as part of a proposed settlement, to create new positions that would be focused on privacy policies and compliance, two of the people said. The agency, in coordination with the company, would set up an independent committee to oversee Facebook’s privacy efforts. That committee and the F.T.C. would appoint an outside assessor to monitor the company’s handling of data.

The company has also agreed to assign an executive as a privacy compliance officer, making privacy oversight a job within the top ranks, the people said. Mr. Zuckerberg could be given the job, according to one person with knowledge of the talks, although another person expressed doubts.

Facebook has apologized for reacting slowly to the revelations about Cambridge Analytica. But the company has said an academic researcher with access to the data broke its rules by sharing he data with the consulting firm.

At the same time, sentiment in Washington was turning against Big Tech. It had become clear that Russia used online services to interfere in the 2016 presidential election. YouTube, Twitter and Facebook were being blamed for the spread of harmful content and fake news. Politicians like Senator Bernie Sanders of Vermont, who is now running for the Democratic presidential nomination, were accusing Amazon of unfair labor practices.

Democrats in Washington have recently been pushing for more accountability for top executives of companies under scrutiny.

Source link Nytimes.com

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