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Facebook paid—I would call it, bribed—the Federal Trade Commission $5
billion to protect Mark Zuckerberg from personal liability in violating
the privacy of millions of users.
I didn’t conjure that up. That was the clear statement of James Kohm, the agency’s associate director of the division of enforcement, who conducted the Facebook investigation. At last week’s announcement of
the $5 billion Facebook settlement, Kohm responded to Axios’ David
McCabe, who asked why, if the investigation was so exhaustive, was
Zuckerberg, the CEO and controlling shareholder, with acknowledged
control over every aspect of Facebook’s business, not deposed?
“Part of getting this tremendous result with the tools we had is we
didn’t need to depose him, but we could use that to get more protections
for the public,” Kohm replied. Since the “tremendous result” consists
mainly of a fine and establishing an easily ignored privacy committee on
a board of directors Zuckerberg controls, the quid pro quo, cash for
scotching the deposition, is pretty obvious. Pressed further, Kohm said,
“We got a lot of relief that we couldn’t otherwise have obtained, and
that is in some small part due on not going further.” He added that
testifying under oath would have opened Zuckerberg up to “a huge amount
of litigation outside of the Federal Trade Commission.” Why that’s
something the FTC should concern itself with isn’t clear.
While FTC chair Joseph Simons gave the smarter, more political
answer—the FTC had so much documentary evidence from Facebook that a
deposition just wasn’t necessary—Kohm gave the game away: Facebook
offered cash to keep Zuckerberg’s testimony under wraps. Kohm expanded
on these comments to Business Insider:
it was very important to Facebook to shield Zuckerberg, and the company
offered more money in a settlement to ensure that. Otherwise, Facebook
would have forced the FTC to take it to court.
There’s a name for this, which I said at the beginning: a bribe, or
if you’d like to be more demure, a payoff. The FTC doesn’t need the
threat of court to bring in Zuckerberg for questioning. The agency has
its own subpoena power. It even has its own lawyers in case a company
won’t settle. The lawyers have even conducted trials before!
The idea that resisting a settlement could be used as a sufficient
stick defies logic; the FTC should be all too happy to take a miscreant
company to court and achieve a result that exposes its wrongdoing to the
public. Arguing that you could get a “better” result without
investigating not only makes no sense, it also reveals the corrupt game
at the heart of high-level regulatory enforcement. Facebook bought the
silence of its CEO for $5 billion.
The problem for Facebook is that this was a split decision, and the
FTC’s Democratic members aren’t keeping quiet about the corrupt bargain.
In an MSNBC segmentremarkable
for its news value, FTC commissioner Rohit Chopra told Kasie Hunt, “I
was frustrated that we stopped the investigation before we really knew
what was going on. We did not collect the documents in Mark Zuckerberg’s
hands. We did not hear his testimony under oath.” This is a
commissioner of a federal agency saying that the agency took a payment
in exchange for what he called “blanket immunity” for a top executive of
the offending company.
This is what has become of accountability, and its roots go back well before the Trump era. It’s reminiscent of the foreclosure fraud settlement,
when activists were told that the investigation could not be conducted
because of the need to speed relief to borrowers (relief, I should add,
that mostly never came). Law enforcement has unilaterally decided,
without listening to public input, that settlements serve as
accountability in all cases, no matter the violation, no matter the
abuse.
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This defining down of justice degrades all of us. It not only sets a
pathetic bar for what constitutes punishment, but it virtually ensures
that law enforcement will have to return to a podium again, to announce
that this settlement, with its rigid standards and monitoring,
will finally solve the problem. Everyone knows it won’t, but we play the
game, we talk about “record fines” and “stringent oversight” as if any
of it matters. It’s a brutal cycle that continually brutalizes the
American people, while corporate executives laugh and throw off
ill-gotten gains as a cost of doing business.
As Chopra pointed out, “Fining a company like Facebook a couple weeks
of revenue is not going to fix the fundamental problem that we have
with these digital platforms.” That’s correct. Fining a company—which in
effect just fines its shareholders, and not even that because the stock prices go up when
investigations close—does nothing to protect the public. That’s because
protecting the public was never the point. It was securing the bribe.
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