Congress Is Pissed at Facebook and the FTC
Republican and Democratic lawmakers alike are furious over reports that the Federal Trade Commission is prepared to settle with Facebook over widespread privacy violations for just $5 billion. But that doesn’t mean there’s currently an acceptable bipartisan solution floating around the marble halls of the Capitol.
“The terrible message sent by this tap on the wrist is that enforcement of privacy protections is a hollow paper tiger in our nation,” senator Richard Blumenthal (D-Connecticut) told WIRED Wednesday. “It has to be structural and behavioral and not just monetary, and this amount of money is way too low.”
Blumenthal teamed up with senators Josh Hawley (R-Missouri) and Ed Markey (D-Massachusetts) in penning a strongly worded exploratory letter to the FTC earlier this week, after The Wall Street Journal first reported that the commission voted along party lines, three Republicans to two Democrats, to approve the Facebook settlement.
“It is clear that a $5 billion fine alone is a far cry from the type of monetary figure that would alter the incentives and behavior of Facebook and its peers,” the senators penned to the FTC’s five commissioners. “The public expects the Commission to put consumers first and to take all necessary steps in your power to remedy Facebook’s privacy problems. We are highly disappointed to learn that the Commission has apparently failed to reach a strong, bipartisan agreement, sending the wrong message to tech companies.”
Hawley—a freshman Republican who has turned heads with his aggressive calls for ratcheting up regulations on big tech—was even more blunt in person.
“It’s an unserious number. I think it just communicates a lack of seriousness on the FTC’s part,” Hawley told WIRED as he was preparing to cast a vote on the Senate floor. “If the reports are accurate that the agreement will include no restrictions on user data collection and then sharing with third parties, then what was the consent decree good for in the first place? Why do we even have it?”
But even the lawmakers working hardest to pressure the FTC on Facebook are divided along party lines over how Congress should regulate tech companies going forward. All three senators want new, contemporary laws and regulations to rein in corporations like Facebook. But Blumenthal and Markey are more focused on passing sweeping privacy constraints that are unpalatable to most conservatives. Hawley’s approach, meanwhile, is also informed by claims that tech companies are censoring conservatives—a charge made by many Republicans, and one that tech companies have repeatedly denied.
But on this specific privacy issue with Facebook and the FTC, Hawley’s almost the most progressive voice in the room. Many Democrats have called for beefing up the FTC’s powers, but Hawley is so frustrated by what he sees as a low-ball number that lacks any teeth, he’s openly toying with the idea of stripping the commission of its current role as the judge in these kinds of cases.
“I’m worried and I’m losing confidence in their enforcement ability and I’m losing confidence in the seriousness with which they approach this task. Maybe they’re the wrong agency,” Hawley said. “It may just be they’re not structured for this—that they’re better structured to do oversight rather than enforcement in this way. And so maybe we need to make some changes that will actually give the real enforcement authority to an agency that’s better positioned to do that.”
Hawley isn’t saying exactly which arm of the federal government he thinks could take over for the FTC, though he did praise the Department of Justice for “being serious about using the jurisdiction that they have.”
Shifting regulatory authority isn’t good enough for many Democrats, especially those who are calling to enhance their oversight power. That’s partly why Blumenthal is firmly in the camp of lawmakers calling for a new law—or laws—to govern Silicon Valley firms that they see as playing fast and loose with their users’ data.
“I think we need stronger privacy protection in legislation. We can pass legislation,” Blumenthal said. “You need legislation that will toughen and strengthen enforcement, as well as the standards.”
Still other lawmakers go further.
“It's more than just legislation. I believe we need to break Facebook up and the other big tech giants,” senator Elizabeth Warren (D-Massachusetts) told WIRED as she hustled back to her office, walking next to the trams that run underneath the Capitol. The presidential candidate staked out tech monopolies as a key issue early on in her campaign. “I believe in competition and we don't have competitive markets here. I also worry about Facebook’s violations of people's privacy for their own profits.”
And Warren isn’t mincing words when it comes to the FTC.
“I think it doesn't even qualify as a slap on the wrist. It's a way to let Facebook move forward without any legal responsibility,” Warren said. “It proves once again that there's no serious regulation over one of the most powerful companies in the world.”
Still, these issues have been batting around Capitol Hill for more than a decade, yet nothing has happened. And many lawmakers approached by WIRED who serve on the Commerce Committee that has jurisdiction over these issues didn’t even seem aware of the reported FTC settlement terms with Facebook. Others seem in no hurry to change the status quo.
“I think there’s obviously going to be a lot more investigations to occur, a lot more potential issues that arise,” senator Cory Gardner (R-Colorado), a member of the Commerce Committee, told WIRED as he was rushing through the basement of the Capitol. “I don’t think this is the last matter or the last to be set on concerns, violations or improprieties.”
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And there are plenty of ongoing investigations and lawsuits into Facebook, including a criminal investigation in New York, a Department of Housing and Urban Development lawsuit, and even a reported SEC probe, just to name a few on American soil alone.
Markey contends lawmakers will be forced to flash their fangs if the FTC lies down on this settlement, because he says the consequences of allowing Facebook to do end runs around federal regulations would ripple across Silicon Valley. And he says the FTC—along with Congress—can’t allow that message to ring throughout the Valley.
“I think it says that if you violate the privacy of Americans that the company will only have to pay the equivalent of a privacy parking ticket,” Markey said. “Notwithstanding the infinitely larger profits that they made from compromising that privacy and that's a message to other companies that makes it clear to them that they can actually profit from the violation of privacy, because the penalty they pay is only a small fraction of the profit which they were able to reap from that.” Facebook reported over $22 billion in net income last fiscal year.
While lawmakers across the ideological spectrum have been simmering in anger ever since the Cambridge Analytica news broke more than a year ago, Congress collectively continues to bicker over the details of even areas where the two parties seem to largely agree. Despite ever louder bipartisan calls for a federal privacy law, nothing has emerged from that effort. Even the lawmakers most attuned to tech issues remain divided on whether to strip the FTC of power or to pump the agency full of steroids and cash. To many observers, Congress and all its leaders appear increasingly ill-equipped to tackle these issues. As Silicon Valley continues to dramatically shape the country’s future, it seems, more than ever, this Congress is living in the past.