Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple podcast, SoundCloud
Speaker 1: and on Bloomberg dot com slash podcasts. You'd never guess
Speaker 1: from Facebook's repeated privacy scandals that the company has been
Speaker 1: under consent agreement with the Federal Trade Commission over a
Speaker 1: privacy breach since twenty eleven. But now users, lawmakers, and
Speaker 1: data security advocates are demanding a forceful government response, and
Speaker 1: that job mainly falls to the chairman of the FTC.
Speaker 1: Joining me is an expert in privacy law, Joel Riidenberger,
Speaker 1: Professor at Fordham Law School. Joel, is Facebook the worst
Speaker 1: offender of privacy in the world of social media or
Speaker 1: are we just hearing more about its violations. That's a
Speaker 1: great question. It's not really clear. I think Facebook probably
Speaker 1: has the largest number of users, so any large scale
Speaker 1: violation that Facebook does will affect more people than most
Speaker 1: other organizations. I think some of the big companies like
Speaker 1: Google and Amazon are also facing issues, but we certainly
Speaker 1: hear more about Facebook because of their behavior. Sources are
Speaker 1: telling Bloomberg that the FTC is expected to hit Facebook
Speaker 1: with the record fine in the current investigation involving Cambridge Analytica.
Speaker 1: What can you tell us about that investigation? Well, Facebook
Speaker 1: settled with the FTC a number of years ago. There
Speaker 1: was two thousand eleven for essentially collecting and sharing information
Speaker 1: from its users without proper consent, and it certainly seems
Speaker 1: for what's been made publicly available, that's exactly what happened
Speaker 1: in Cambridge Analytica, along with a whole series of other
Speaker 1: scandals this year. That's not the only one. Cambridge Analytica
Speaker 1: affected about eighty seven million users. For the ft SEE
Speaker 1: to really show that it matters as a privacy enforcement agency,
Speaker 1: they're going to have to issue a quite substantial fine.
Speaker 1: And Facebook has revenue of what approximately fifty billion dollars
Speaker 1: in the last year, So if it's anything like the
Speaker 1: fines that the FTC has issued thus far for privacy violations,
Speaker 1: it's chunk changed for Facebook. I mean, this is going
Speaker 1: to have to be a fine in the nine figures
Speaker 1: for it to actually be taken seriously. Do find even
Speaker 1: work with a company like Facebook. They haven't worked in
Speaker 1: the past so some people are calling for it to
Speaker 1: have a privacy law. Others are calling for breakup of Facebook.
Speaker 1: What do you think is needed, Well, there's no question
Speaker 1: that we need a stronger privacy laws in the United
Speaker 1: States to deal with these kinds of problems. The fine,
Speaker 1: if the fine is sufficient enough, it might be successful
Speaker 1: in changing a company like Facebook. But something else. You know,
Speaker 1: we just don't have the capacity right now, and the
Speaker 1: FTC doesn't to deal with all of the different scandals
Speaker 1: that Facebook was involved in this year. I mean, you
Speaker 1: have Cambridge ANALYTICAUP, you have Facebook. Uh. It was exposed
Speaker 1: that they were tracking non Facebook users across the web,
Speaker 1: they were tracking logged out users across the web. They
Speaker 1: were capturing call history of clients. They bought What's Apped,
Speaker 1: and the co founder this past year quit essentially in
Speaker 1: discuss because of their data misuse. Facebook tries to capture
Speaker 1: telephone numbers, claiming they needed it for dual factor security
Speaker 1: to make your account more secure, and then it turns
Speaker 1: out they turned around and use those phone numbers for
Speaker 1: all sorts of other purposes that weren't disclosed. That's a
Speaker 1: huge problem. They've been involved in manipulating the elections in
Speaker 1: the United States and they knew about it and denied it.
Speaker 1: We saw the the press reports that Cheryl Sandberg knew
Speaker 1: of the Russian election activities, and she publicly denied it,
Speaker 1: and she privately tried to stop the investigation. You know,
Speaker 1: all of these sorts of things are occurring, I think
Speaker 1: in large part because the tech giants have built a
Speaker 1: economic model on monetizing individuals data essentially without their effective consent,
Speaker 1: and that's a problem. We need to be able to
Speaker 1: address that effectively in this country. So what about the
Speaker 1: privacy experts who are calling for breaking up Facebook? Is
Speaker 1: that even a possibility that the FTC may try that.
Speaker 1: I guess it's a possibility, but the legal authority to
Speaker 1: do that would be antitrust, and I don't think Facebook
Speaker 1: would necessarily be the first target for an antitrust breakup order.
Speaker 1: It might be part of a consent decree, but I'm
Speaker 1: not sure what you would break off from Facebook. Because
Speaker 1: the problem with Facebook is the core of data misuse
Speaker 1: comes from its core business, comes from the main social
Speaker 1: media activity, and that's where we're seeing the essentially non
Speaker 1: consensual use of the data. You know, they purport to
Speaker 1: have customers consent because somewhere buried in terms of service,
Speaker 1: there is something there. There are some settings that can
Speaker 1: be adjusted, but the reality is that the privacy policies
Speaker 1: are so ambiguous. There's absolutely no way a well informed
Speaker 1: consumer can really understand how their data is being used
Speaker 1: and have a tool to say no. That just isn't
Speaker 1: there in the marketplace. Right now, let's just talk for
Speaker 1: a moment about FTC chairman Joe Simons, who talked tough
Speaker 1: when he took over the agency. He's been criticized for
Speaker 1: not being tough enough. What's your take on how he's
Speaker 1: been Well, we haven't seen any action coming from the
Speaker 1: FTC yet. I think the jury is still out as
Speaker 1: to what he's going to do if he gives Facebook.
Speaker 1: I mean, I look at the fine that the British
Speaker 1: Information Commissioner there their privacy regulator, issued against Google this week.
Speaker 1: It was about fifty seven million dollars. That's chump change
Speaker 1: for Google. That's nothing. What would be a big enough
Speaker 1: fine for any of these companies? I think for a
Speaker 1: company like Facebook or another one where their revenue is
Speaker 1: in the forty fifty billion dollar range, you need to
Speaker 1: find over a hundred million dollars for it to actually
Speaker 1: make a difference. Well, we shall see if that happens,
Speaker 1: because I think twenty two and a half million dollars
Speaker 1: against Google was the previous record for the FTC. Great
Speaker 1: to have you on again, Joel. That's Joel Ridenberg. He's
Speaker 1: an expert in privacy law and a professor at Wardom
Speaker 1: Law School. Thanks for listening to the Bloomberg Law Podcast.
Speaker 1: You can subscribe and listen to the show on Apple Podcasts, SoundCloud,
Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brosso.
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