- FTC Reportedly Hits Facebook With Record $5 Billion Settlement by Wired. Some outlets are reporting that this is a fine, but really it’s a settlement. Stock price actually went up after this announcement, telling you that market actually thought the fine/settlement would be higher than $5 billion.
- UPDATE: I spoke to the CEO of the management company who owns the Courtyard Marriott Clemson by Andy’s Travel Blog. I think it’s telling that the CEO of the management company said that the overbooking happen over hours, whereas Andy knows the bookings were made over the course of multiple days. I also find it strange to wait to see what the cancellation rates were before informing people of cancelled bookings. Surely you can just look at the low cancellation rates of normal special events and that would guide that decision to be made earlier than it was?
- Primitive Technology: Crossdraft kiln. Don’t forget to turn on closed captions for more information
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View Comments (14)
The problem is fines make no sense for these issues — the shareholders (who pay the fine) did nothing wrong and won’t change anything. Meanwhile the executives who profited from the bad behavior won’t be punished. FB is a bit unique with Mark owning a large chunk of stock but that just means it’s a cost of power for him (and he doesn’t exactly need $....)
Yeah, that's right — those poor shareholders holding $FB stock; what did they do wrong by investing in a company like Facebook?
Welp, a Pyrrhic fine is clearly a much better deal than getting broken up into several smaller companies, and forced divestment for Mark Z.
Who knew that the government accepted fines as glorified bribes?
They're either part of the solution, or part of the problem. A mere fine is not a viable solution to the new problems big unregulated companies are posing for society.
Once the penalties hurt more than than profits, than behavior changes. Since companies aren't real, don't feel, and can only continue by profits - than the fines need to go up. That fine less than 10 weeks of Facebook profits.
Or make the C-suite personally liable in some form would likely be enough - personal fines, forceful divestment of stock, or purposely isolating jail time would likely be all that's needed.
What a Joke, Gov't coffers enriched by $5 billion, seems like State AG should sue for the privacy violation s by FB and the settlement goes to the residents of the state who privacy was violated.
I think that would send a real message to FAANG on privacy violations.
Not really interested in seeing FTC or govt bureaucracy get bigger from this windfall.
"Andy commentary: I conjected in my first article that overbookings were allowed to happen over weeks or months to attempt to cover up the bookings made at lower rates and notification about the ‘mistake’ didn’t go out until the hotel was sold out with overbookings at higher rates. Robert’s assertion, which I believe is plausible, disproves my claim. So, even though many of the affected customers facing cancellation had reservations booked in September, everyone else did too. It does not appear to be a case of a reservation made in May 2019 superseding one made in September 2018."
Someone on cnbc actually had a good observation on the $5 billion fine- if they want to get tech’s attention that fine needed another 0. $5 billion is what Facebook told the market they were setting aside for it, basically Facebook told the government what to fine it.
That’s just not true. Multiple articles in April reported that Facebook set aside $3 billion.
Then those articles failed you https://news.bloomberglaw.com/privacy-and-data-security/facebooks-5-billion-set-aside-may-be-just-a-down-payment $5 billion was the number they set aside Phil. Recommend you find new sources for market information.
https://www.wsj.com/articles/facebook-sets-aside-3-billion-to-cover-expected-ftc-fine-11556137113
https://www.washingtonpost.com/technology/2019/04/24/facebook-sets-aside-billions-dollars-potential-ftc-fine/
https://www.businessinsider.com/facebook-q1-2019-earnings-revenue-eps-2019-4
Alternatively, you can look at the slides and transcript of their earnings call here:
https://investor.fb.com/investor-events/default.aspx
I recommend you find news sources with market information, MoreSun.
Boom.
https://www.wsj.com/articles/facebook-sets-aside-3-billion-to-cover-expected-ftc-fine-11556137113
https://www.washingtonpost.com/technology/2019/04/24/facebook-sets-aside-billions-dollars-potential-ftc-fine/
https://www.businessinsider.com/facebook-q1-2019-earnings-revenue-eps-2019-4
They specifically said at the end of their earnings call that they set aside $3 billion...
Facebook stock went up more than 5 billion after the 5 billion settlement.
What a joke
Facebook has *already* lost value in anticipation of the fine. Apparently the market expected a larger fine, and this is a correction for that.