Vox: A $5 billion fine won’t fix Facebook. Here’s what would.
Major corporations get caught behaving badly … a lot. And so far, the main solution we’ve come up with is fining them — the Federal Trade Commission hit Facebook with a $5 billion fine this summer, an amount that, while large, will barely make a ding in its business. The $170 million fine the FTC and New York state recently hit Google’s YouTube with is almost laughable considering Google’s overall worth.
Even the $425 million Equifax settlement, which came out of the company’s exposure of some 147 million people’s personal information, promised victims the ability to claim a $125 check. Except too many people signed up, and the pot of money for those checks was just $31 million, coming out to about 21 cents per person.
Just one big bank executive went to jail after the 2008 financial crisis; financial institutions paid more than $300 billion in crisis-related fines, but collectively they made much more than that.
All this raises the question, are fines really the best punishment for holding corporations accountable?
Companies aren’t people, and you can’t put them in jail. You could put the executives that run them behind bars, but that doesn’t happen often. The main option these days is fines, and how well those work is debatable.
But it’s not hopeless. Experts say there are ways to make firms do better, including stomping out the cultural and structural issues that cause problems in the first place, implementing close monitoring after something does go wrong, and making sure accountability mechanisms are in place where they can be for the people responsible.
“As long as it is profitable to break the law, corporations, which are profit-maximizing entities by design, will continue to break the law,” said Sally Hubbard, director of enforcement strategy at think tank the Open Markets Institute and former assistant attorney general in New York state’s antitrust bureau.