Will Facebook Face Record Fines Over Privacy Violations?

privacy breach since twenty eleven. But now users, lawmakers, and data security advocates are demanding a forceful government response, and that job mainly falls to the chairman of the FTC. Joining me is an expert in privacy law, Joel Riidenberger, Professor at Fordham Law School. Joel, is Facebook the worst offender of privacy in the world of social media or are we just hearing more about its violations. That's a

great question. It's not really clear. I think Facebook probably has the largest number of users, so any large scale violation that Facebook does will affect more people than most other organizations. I think some of the big companies like Google and Amazon are also facing issues, but we certainly

hear more about Facebook because of their behavior. Sources are telling Bloomberg that the FTC is expected to hit Facebook with the record fine in the current investigation involving Cambridge Analytica. What can you tell us about that investigation? Well, Facebook

settled with the FTC a number of years ago. There was two thousand eleven for essentially collecting and sharing information from its users without proper consent, and it certainly seems for what's been made publicly available, that's exactly what happened in Cambridge Analytica, along with a whole series of other scandals this year. That's not the only one. Cambridge Analytica

affected about eighty seven million users. For the ft SEE to really show that it matters as a privacy enforcement agency, they're going to have to issue a quite substantial fine. And Facebook has revenue of what approximately fifty billion dollars in the last year, So if it's anything like the fines that the FTC has issued thus far for privacy violations, it's chunk changed for Facebook. I mean, this is going to have to be a fine in the nine figures

for it to actually be taken seriously. Do find even work with a company like Facebook. They haven't worked in the past so some people are calling for it to have a privacy law. Others are calling for breakup of Facebook. What do you think is needed, Well, there's no question that we need a stronger privacy laws in the United States to deal with these kinds of problems. The fine, if the fine is sufficient enough, it might be successful

in changing a company like Facebook. But something else. You know, we just don't have the capacity right now, and the FTC doesn't to deal with all of the different scandals that Facebook was involved in this year. I mean, you have Cambridge ANALYTICAUP, you have Facebook. Uh. It was exposed that they were tracking non Facebook users across the web, they were tracking logged out users across the web. They

were capturing call history of clients. They bought What's Apped, and the co founder this past year quit essentially in discuss because of their data misuse. Facebook tries to capture telephone numbers, claiming they needed it for dual factor security to make your account more secure, and then it turns out they turned around and use those phone numbers for all sorts of other purposes that weren't disclosed. That's a

huge problem. They've been involved in manipulating the elections in the United States and they knew about it and denied it. We saw the the press reports that Cheryl Sandberg knew of the Russian election activities, and she publicly denied it, and she privately tried to stop the investigation. You know, all of these sorts of things are occurring, I think in large part because the tech giants have built a economic model on monetizing individuals data essentially without their effective consent,

and that's a problem. We need to be able to address that effectively in this country. So what about the privacy experts who are calling for breaking up Facebook? Is that even a possibility that the FTC may try that. I guess it's a possibility, but the legal authority to do that would be antitrust, and I don't think Facebook would necessarily be the first target for an antitrust breakup order. It might be part of a consent decree, but I'm

not sure what you would break off from Facebook. Because the problem with Facebook is the core of data misuse comes from its core business, comes from the main social media activity, and that's where we're seeing the essentially non consensual use of the data. You know, they purport to have customers consent because somewhere buried in terms of service, there is something there. There are some settings that can be adjusted, but the reality is that the privacy policies

are so ambiguous. There's absolutely no way a well informed consumer can really understand how their data is being used and have a tool to say no. That just isn't there in the marketplace. Right now, let's just talk for a moment about FTC chairman Joe Simons, who talked tough when he took over the agency. He's been criticized for not being tough enough. What's your take on how he's been Well, we haven't seen any action coming from the

FTC yet. I think the jury is still out as to what he's going to do if he gives Facebook. I mean, I look at the fine that the British Information Commissioner there their privacy regulator, issued against Google this week. It was about fifty seven million dollars. That's chump change for Google. That's nothing. What would be a big enough

fine for any of these companies? I think for a company like Facebook or another one where their revenue is in the forty fifty billion dollar range, you need to find over a hundred million dollars for it to actually make a difference. Well, we shall see if that happens, because I think twenty two and a half million dollars against Google was the previous record for the FTC. Great to have you on again, Joel. That's Joel Ridenberg. He's an expert in privacy law and a professor at Wardom

Law School. Thanks for listening to the Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcasts, SoundCloud, and on Bloomberg dot com slash podcast. I'm June Brosso. This is Bloomberg