The US government says ditching its controversial $5 billion settlement with Facebook could result in a 'far worse' deal for consumers (FB)


facebook ceo mark zuckerberg

  • The US government is warning that attempting to change the $5 billion FTC settlement with Facebook could result in a far worse deal.
  • Critics have savaged the settlement, arguing it is ineffectual, and non-profit EPIC has sought to get involved in the legal process.
  • US attorneys counter that there’s no guarantee that the ultimate outcome of this could produce better results than the FTC managed.
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The US government has a warning for critics of the Federal Trade Commission’s $5 billion settlement with Facebook over privacy issues: Don’t be so sure a better outcome is possible.

The FTC recently reached a multi-billion dollar settlement with the Californian social media giant over alleged violations of a 2011 consent order concerning its handling of users’ data. It’s a record-breaking fine — but critics have argued that it is ultimately ineffectual, amounting to only a fraction of Facebook’s annual profits, and it’s not accompanied by any more fundamental structural changes to the company’s business model.

The Electronic Privacy Information Center (EPIC), a privacy-focused non-profit organization, is one such critic. It filed a motion to intervene in the case, arguing the settlement “is not adequate, reasonable, or appropriate” — and now US government lawyers are hitting back.

In a court filing on Monday, US attorneys argue that EPIC is seeking “to intervene to place itself in the government’s shoes because it wishes the Stipulated Order were different.” They argue that EPIC doesn’t have proper grounds to get involved in the case, and also make an interesting argument as to the risks of any such meddling from third parties.

Contending that ‘[t]he proposed settlement fails to safeguard the interests of Facebook users’ … EPIC presumably wants the Court to reject the proposed settlement in favor of some other penalty against Facebook that would—in EPIC’s opinion—safeguard Facebook users’ interests,” the filing reads.

“But it is pure conjecture that rejecting the proposed settlement would lead to a different or better outcome that would ‘safeguard the interests of Facebook users’ in the manner EPIC’s prefers. Indeed, rejecting the settlement could yield multiple other outcomes in litigation or later settlement far worse for consumers.”

In other words, the US government is arguing: If the settlement went to court the ultimate outcome might be significantly worse for ordinary consumers than it is now.

To be sure, there’s always a risk when you choose to litigate a matter in court. But it’s worth noting that the settlement the FTC ultimately struck with Facebook is markedly weaker than options that were at one point being considered. The FTC explored the possibility of fining Facebook tens of billions of dollars, and holding CEO Mark Zuckerberg personally accountable, but that did not ultimately happen.

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