Op-Eds & Articles

Facebook needs more than a $5 billion fine. It needs a new business model

Open Markets Director of Enforcement Strategy Sally Hubbard published an op-ed on CNN Business on the Federal Trade Commission’s $5 billion settlement with Facebook and asserts that the company needs a new business model. “Instead of fines, changing destructive business models and anticompetitive practices is the only way to lessen the platforms’ harms,” Hubbard writes. “These fixes fall into four main buckets, spelling out the acronym PAIN: privacy, antitrust, interoperability and non-discrimination.”

July 25, 2019  |  by Sally Hubbard
Read on CNN Business

The Federal Trade Commission (FTC) is letting Facebook off the hook.

On Wednesday, the FTC announced a $5 billion fine on Facebook over rampant privacy abuses that violated a 2011 order — the largest in the agency’s history. But even multibillion-dollar fines don’t cause tech giants enough pain to stop bad behavior. For Big Tech, fines are a rational cost of doing business.

Google, for example, has handed over more than $9 billion to the European Commission since 2017 for antitrust violations, without skipping a beat. And immediately after reports earlier this month that Facebook would settle with the FTC, the company’s stock rose nearly 2%.

Instead of fines, changing destructive business models and anticompetitive practices is the only way to lessen the platforms’ harms. These fixes fall into four main buckets, spelling out the acronym PAIN: privacy, antitrust, interoperability and non-discrimination.

Privacy

Meaningful privacy regulations, not crafted by Big Tech lobbyists, would not only protect Americans from ubiquitous surveillance, but would also level the competitive playing field.

Facebook and Google have 360-degree views of what their users read, think and do thanks to their ability to track users across millions of websites and in the real world. To get an idea, you can see all the data Google has collected on you here.

Publishers and content creators that don’t read your emails, know every search you’ve done, track your location, know who your friends are, know every YouTube video you’ve watched or what you’ve purchased across the web, for example, can’t really hope to compete with Google and Facebook for targeted advertising dollars. That’s why Facebook and Google are capturing the lion’s share of advertising revenue. Last year, Google’s ad revenue rose to $116 billion, and Facebook’s rose to $56 billion. Meanwhile, news publishers’ combined ad revenue fell to $16.4 billion in 2017.

Read the full op-ed on CNN Business.

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In America today, wealth and political power are more concentrated than at any point in our country’s history.

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