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Business

Facebook is facing a big penalty, but regulators are divided over how big




WASHINGTON – Facebook's announcement in late April that it had set aside $ 3 billion to $ 5 billion to settle claims that mistreated users' personal data suggested a strong consensus from federal regulators that the social media giant had to be held accountable . [19659002] But the reality behind the scenes at the Federal Trade Commission is far more complicated, reflecting the policy and giving and taking the negotiations.

The FTC's five commissioners agreed a few months ago that they wanted to pursue a historic punishment that would show the agency's teeth. But now the participants are divided on the scope and extent of the technology company's punishment, according to three people with knowledge of the conversations who spoke on condition of anonymity.

The division complicates the last few days of the talks. [19659002] Along with disagreement on proper financial punishment, one of the most controversial undercurrents through the negotiations has been the degree that Mark Zuckerberg, Facebook's CEO, should be held personally responsible for any breach of contract, according to two of those people.

Facebook has set a fierce fight and says that Zuckerberg should not be held responsible for the actions of all 35,000 of his employees.

The conversations may fall apart, but negotiations continue ahead and are expected to conclude within days. This account of the FTC's Facebook survey is based on half-dozen interviews.

Joseph J. Simons, the Commission's Republican leader, appeared to have votes from the two other Republican commissioners, and gave him the three needed to approve an agreement. But a 3-to-2 decision on party lines, which Mr. Simons has said he wants to avoid, can lead to strong attacks on Capitol Hill.

The bets are huge for the agency and Mr. Simons. The case is being closely monitored globally as a litmus test on how the US government will police the country's tech giants.

The Commission has a reputation for pulling a few strokes, especially as opposed to regulators in Europe, which have been heavily involved in both privacy and antitrust issues. The largest F.T.C. nice to a tech company was $ 22.5 million against Google in 2012, for misleading users about how some of the tools track them.

Any settlement will also be seen as a measure of the Trump administration's willingness to punish one of the country's most valuable and influential companies. The administration has turned away regulations in many industries, but President Trump has repeatedly said that technology giants like Facebook and Amazon have too much power.

Many Democrats have led the efforts to clear Silicon Valley.

"This is hugely important decision because it is being watched by all these big companies to see if it is actually going to be a new day of enforcement," said Senator Ron Wyden, an Oregon Democrat who has pushed Mr. Zuckerberg shall be held personally liable in any agreement.

Rohit Chopra, one of the two Democrats of the Commission, has publicly called for stronger punishment by repeated offenders of the FTC rules.

But Mr. Simon has Shockedly unwilling to force the issue and bring the case to court, which can be a risky move, he has recently intensified his efforts to get at least one of the two Democrats, one of the people with knowledge of the talks. the internal discrepancies have maintained a final agreement.

In addition to fines, Facebook has agreed as part of a proposed settlement to create new posts that will focus on privacy policy and leave behind two people said. The agency, in coordination with the company, would set up an independent committee to monitor Facebook's privacy work. The Committee and F.T.C. would appoint an external reviewer to monitor the company's handling of data.

The company has also agreed to assign an executive as a compliance compliance officer, who makes privacy monitoring a job in the top ranks, the people said. Mr. Zuckerberg could get the job, according to a person with knowledge of the conversations, even if another person expressed doubts.

Facebook has complained about reacting slowly to the revelations about Cambridge Analytica. But the company has said that an academic researcher with access to the data broke the rules by sharing the data with the consulting firm.

At the same time, the sentiment in Washington turned to Big Tech. It was clear that Russia used Internet services to disrupt the presidential election in 2016. YouTube, Twitter and Facebook were blamed for the spread of malicious content and fake news. Politicians such as Senator Bernie Sanders of Vermont, now running for the democratic presidential election, accused Amazon of unfair work practices.

Democrats in Washington have recently pushed for more responsibility for top executives of companies under control.

A few weeks ago, the commissioners were shown an updated proposed deal, which had a fine of about $ 5 billion and no mention of responsibility for Mr. Zuckerberg.

The proposal set up a frenzy of discussion among the commissioners and employees. Soon, details of the discussion began to leak into the news media.

Facebook's senior executives believed that people within the FTC were disclosed details to influence negotiations, according to two people.

Facebook responded by announcing the expected $ 3 billion to $ 5 billion penalties, partly to put expectations on what the company thought it finally had to pay, the two said.

Conversations between Facebook and agency officials have continued over the past few days, Mr. Simons attempted to persuade Miss Slaughter, a democrat who came aside with Mr. Chopra, to see his perspective. The commissioners are expected to vote for the settlement in the coming days.

"Having a good two-sided consensus Sus makes a big difference to the agency's effectiveness, "said Mr. Simons in an interview in February. "So I think it's very important and we try very hard to do it."



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