Apparently it’s easier to just pay fines than it is to make active changes to a site’s privacy policies — when your Big Tech company is big enough.
In the last quarter, Facebook pulled in more than $15 billion in revenue, and reported that it would set aside $5 billion for any fines “as and when necessary.” The Federal Trade Commissions (FTC) spent a year investigating Facebook and its privacy scandals, so the number isn’t outlandish. According to Politico, Facebook is still in negotiations to figure out a settlement with the FTC.
But a fine is not what the social media platform fears.
The FTC has the power to demand that Facebook change the way it handles its advertising business, which is the source for most of the company’s revenue. A former FTC official told Politico that Facebook “prefers to take a short-term financial hit rather than accept a government-led overhaul.” The official said, “It’s in Facebook’s interest to get the checkbook out and move on.”
Facebook wrote in its quarterly report that the FTC investigation “remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”
Much of the company’s revenue in the past quarter came from advertising, especially on mobile devices. Facebook reported that $14.912 billion of the revenue stemmed from advertising. 93% of this revenue came from the mobile app.
In its First Quarter results, Facebook announced it had a 26% growth year over year. Its figures have not suffered from the multiple privacy scandals. Those include the data breach exposing 50 million Facebook users’ private information, the upload of 540 million users’ data to Amazon Cloud where it was publicly exposed, and the compromise of millions of passwords.
The Next Web commented that tech companies don’t seem to suffer when they are fined by governments. In fact, Google, fined by the EU for $5.1 billion in 2018, gained $3.2 billion in profits.