What the FTC Fining Facebook $5B May Mean for Marketers
Facebook Ads are essential to the marketing mix for many organizations now, so knowing if the social network will need to follow new data guidelines as the result of a recent $5 billion fine from the FTC is required reading. The quick answer appears to be “not yet,” but third-party oversight may be coming.
What that third-party oversight looks like is probably going to be more governmental than previous situations Facebook’s seen. Back when it had video view metrics problems, the third-party oversight ended up coming from private organizations.
But this time, Congress got involved when the public outrage reached its ears. U.S. citizens were concerned about how a company, the now defunct Cambridge Analytica, had used the data of millions of Americans without their knowledge or permission. The data, pulled from Facebook, allowed the company to target citizens with messages from then-presidential-candidate Donald Trump, attempting to persuade them to vote for him.
Up until now, one of the reasons Facebook has avoided much of the U.S. government regulation that comes with being a media company is that it instead claims it’s a tech company. Similarly, PCMag.com reported on Friday that for the purpose of Facebook’s fight with the FTC, Facebook is claiming it’s not a social media network.
While some analysis reflects doubt that Facebook will see much change as a result of the fine and, therefore, marketers — Wired’s article on Friday noted that Facebook had long been a foe of data privacy regulation, including what will come online in California in 2020. The law that will take force in six months heavily regulates marketers’ use of data from that state’s citizens.
What Wired then adds shows the FTC fine isn’t all Facebook has to worry about regarding data privacy, which could mean the company will move to regulate itself further to pre-empt possible government oversight. (Facebook did make a lot of changes to its data policies around the time Mark Zuckerberg testified to Congress about Cambridge Analytica.)
“Facebook still faces multiple investigations in the U.S. The Securities and Exchange Commission launched a probe last year in the wake of the Cambridge Analytica revelations. Earlier this year, Facebook’s data deals with other companies sparked a criminal investigation by federal prosecutors in the Eastern District of New York. The company is also facing a lawsuit from the U.S. Department of Housing and Urban Development, filed in April, over allegations its advertising platform enabled housing discrimination. When rumors of possible antitrust investigations leaked last month, reports described the FTC negotiating a claim over any future looks into Facebook. And that’s before you even get to Europe, where [GDPR] has put Facebook squarely in the sights of E.U. regulators.”
Meanwhile, if Saturday’s analysis from the Associated Press holds true about the company that generated $56 billion in revenue last year, the record fine from the FTC won’t have as much of an impact as it would on other organizations. That, perhaps, is a foreshadowing of what type of third-party oversight and data privacy regulations will emerge. The AP states:
“The reported $5 billion penalty is barely a tap on the wrist, not even a slap,” said Senator Richard Blumenthal, a Democrat from Connecticut. “Such a financial punishment for a purposeful, blatant illegality is chump change for a company that makes tens of billions of dollars every year.”
He and others questioned whether the FTC will force Facebook to make any meaningful changes to how it handles user data. This might include limits on what information it collects on people and how it targets ads to them. It’s currently unclear what measures the settlement includes beyond the fine.
What do you think, marketers?
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Related story: Facebook Ads to Lose Even More Data as FTC Mulls Fines?