When Facebook Inc. (NASDAQ: FB) announced its first-quarter financial results last week, the company said it had set aside $3 billion to pay for an expected fine of between $3 billion and $5 billion from the U.S. Federal Trade Commission (FTC). The company’s share price rose by more than $10.
The moral of that story is that $3 billion to $5 billion is pocket change to Facebook. Or, as Kara Swisher put it in The New York Times, it’s a parking ticket. Investors don’t appear to care about the amount, so why should Facebook. In order for Facebook to feel some pain and, maybe, change its behavior, that range has to rise by 10 times.
Investors don’t care about a measly $5 billion fine because users, apparently, don’t care either. Facebook’s user numbers in the first quarter rose year over year by 8%, both for daily active users (to 1.56 billion) and for monthly active users (to 2.38 billion). Do the social media site’s users really not care or are they just ignorant of what Facebook has been up to with their personal information? With numbers of that size, why should Facebook care? There are suckers born every minute.
TeamBlind, an anonymous social networking platform for professionals in a variety of industries, recently polled its technology industry users and asked a straightforward question: “Do you trust Facebook with your data?” Just 11% of the 10,361 respondents said they did. Less than 25% of Facebook’s own employees (n=400) said they did.
Nearly 90% of all respondents to the TeamBlind survey said they didn’t trust Facebook with their data. Employees at four companies — Amazon, Google, Apple and Microsoft — posted the highest negative rating: 93% said they didn’t trust the social media giant.
Are Facebook’s fellow techies right to be so skeptical of how the company handles user data? At Tuesday’s opening session of Facebook’s F8 developer conference, CEO Mark Zuckerberg outlined a six-point plan to put the company on a “the future is private” path.
What Zuckerberg fails to understand (or deliberately ignores) is that to its users, privacy means privacy from Facebook, not Facebook privacy. The company has developed software that knows more about its users than they themselves probably imagine. Facebook uses all that data to sell advertising that is so targeted to an individual user that the ads command a premium price from advertisers.
And Facebook is not about to give that up. Instead, Zuckerberg’s six-point plan is based on private interactions, encryption, reduced permanence, interoperability and secure data storage. As defined by Zuckerberg, all six of these points will be true inside the walled garden that is Facebook. Users will be able to have private conversations on and among Facebook, Instagram and WhatsApp. and the company will continue to collect all the data (and probably more) that they already collect but will be more restrictive about how they share it. Exactly how that will happen was not discussed.
In late March, the U.S. Department of Housing and Urban Development (HUD) sued Facebook charging that the company violated the Fair Housing Act by allowing potential advertisers to redline neighborhoods, excluding Facebook users who exhibited interests like “Hispanic Culture.” Facebook had been first made aware of this problem in 2016 — and hasn’t fixed it yet, although it did claim to try.
In a recent Washington Post opinion piece, Zuckerberg seems to support government regulation of the internet, not just Facebook. Like the six-point plan, however, there’s a not-too-well-hidden agenda. Zuckerberg rather disingenuously wants to make all Facebook’s problems with content and the integrity of elections issues that only government regulation can solve. Privacy “should protect [a user’s] right to choose” how his or her information is used “while enabling companies to use information for safety purposes and to provide services.” That leaves Facebook (and other internet companies) free to continue making piles of cash while paying an occasional $5 billion fine to keep the wheels greased.
Venture capitalist and author of “Zucked: Waking Up to the Facebook Catastrophe,” Roger McNamee, recently wrote, “By draping his essay in the guise of cooperation, Zuckerberg hopes to distract policymakers from the real threat. Internet platforms like Facebook and Google dominate the public square in every country in which they operate. … No one elected these companies and they refuse to be held accountable.”
Zuckerberg’s six-point plan appears to be his latest attempt at dodging accountability while maintaining Facebook’s gigantic revenues and profits. It may safe the platform’s image so it’s no longer on the list of companies with the worst reputation.