Advocacy Groups Urge FTC to Pursue Facebook Breakup
24 January 2019 - 10:53AM
Dow Jones News
By John D. McKinnon
WASHINGTON -- Several advocacy groups are urging the Federal
Trade Commission to seek a breakup of Facebook Inc. as it weighs
possible penalties against the social media company for privacy
violations.
Facebook has acknowledged that the data firm Cambridge Analytica
improperly obtained personal data of millions of users. The FTC is
nearing completion of an investigation into the matter and is
weighing penalties, including a substantial fine.
Among other remedies, "the FTC should require Facebook to unwind
the acquisition of both WhatsApp and Instagram" for its failure to
protect the data of those apps' users, according to a draft letter
from the groups to the FTC. A copy of the letter, dated Jan. 24,
was obtained by The Wall Street Journal.
"Facebook has operated for too long with too little
accountability," said Marc Rotenberg, president of the Electronic
Privacy Information Center, one of the groups expected to sign the
letter. Others include Color of Change, which advocates racial
justice, and Open Markets Institute, which promotes business
competition.
WhatsApp is a text-messaging app and Instagram allows users to
share photos and videos.
The FTC, which is now subject to the partial government
shutdown, didn't respond to requests for comment. One legal expert
said the commission was unlikely to seek a breakup but could impose
a significant fine.
Facebook didn't immediately comment on the letter. Facebook
officials don't believe the FTC has the legal grounds to tie any
violation of the consent decree to a breakup of the company,
according to a person familiar with Facebook's thinking.
The FTC in 2011 charged Facebook with deceiving consumers by
promising they could keep their information on Facebook private,
and then repeatedly allowing it to be shared and made public. The
case was settled by a consent decree finalized in 2012.
Any new settlement is expected to include a substantial fine and
strengthened consent decree, but the advocacy groups say the FTC
must do more to re-establish its credibility as an enforcer and
send a message.
Cambridge Analytica, which did work for the campaign of
President Donald Trump, was suspended from Facebook's platform
following the disclosure.
There is little evidence the FTC's Republican majority would
support a breakup. But one of the five FTC commissioners, Democrat
Rohit Chopra, has publicly advocated tougher penalties for
companies that become repeat offenders, including management
changes and divestiture of business lines.
David Vladeck, a former FTC consumer-protection official who is
now a Georgetown University law professor, said a breakup is "not
going to happen -- that's an antitrust remedy."
He predicted that fines could reach considerable levels,
however, as a way of sending a message to the industry. "A nice
round number like $1 billion would do it," Mr. Vladeck said.
Write to John D. McKinnon at john.mckinnon@wsj.com
(END) Dow Jones Newswires
January 23, 2019 18:38 ET (23:38 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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