Facebook's new plan doesn't protect your privacy, and neither does the FTC

Editor's Note: (Sally Hubbard is director of strategic enforcement at the Open Markets Institute. The opinions expressed in this commentary are her own.)

Facebook didn't get where it is today by protecting your privacy.

The company made $56 billion in 2018, in part by tracking people both on and off its platform and then selling targeted advertisements based on that surveillance. Yet when Facebook announced a shift to a "privacy-focused communications platform" in March and unveiled a redesign toward private messaging at its F8 developers conference on Tuesday, Facebook's stock value did not even dip. How could that be, if surveillance is essential to Facebook's business model?

Perhaps all this privacy talk is nonsense, and investors know it.

Meanwhile, the Federal Trade Commission, the agency charged with protecting consumers and enforcing a 2011 privacy order against Facebook for violating users' privacy, looks also to be all talk and no action. Although the FTC's settlement negotiations with Facebook are confidential, the agency is considering fining Facebook $3 billion to $5 billion, an amount Facebook can earn in just a month. The fine is a mere cost of doing business that makes breaking the law worth it for Facebook. A report indicates the FTC will not require Facebook to change its data handling practices and will merely require Facebook to create a privacy oversight committee to report to the FTC. But Facebook was already required to send the FTC privacy reports under the 2011 order. None of these remedies adequately protect consumers in light of Facebook's persistent privacy violations. The FTC started its investigation after the Cambridge Analytica scandal, but since then multiple privacy violations have been reported, affecting many millions of users. Facebook has said it is open to increased oversight, according to a new report, and Zuckerberg has called for more regulation of the internet in the past.

Effective remedies must both curb data collection and promote competition, spurring new, innovative business models from Facebook and others. Like many in Silicon Valley, Facebook has been innovating in the wrong direction, building a surveillance architecture that is dangerous for democracy.

Facebook's purported pivot to privacy is anything but

With its shift to private messaging, Facebook may no longer be able to read the text of these encrypted messages, but the company has not mentioned any plans to stop tracking users across millions of websites or to stop monitoring things like their behaviors, connections, interactions, locations, interests or purchases — the ways Facebook tracks users without their knowledge is endless and not at all limited to reading users' posts.

Rather, Facebook has announced new ways to surveil people, such as a new dating feature and integrating shopping into Instagram. Shifting to privacy would mean that Facebook collects less of our personal data, not more of it. And yet these new lines of business also feed Facebook's strategy of keeping users on its platform, rather than on a separate dating app or a brand's own website, allowing Facebook to collect more data, show more ads and make more money.

Around the same time that Zuckerberg announced Facebook's supposed pivot to privacy, he also called for government regulation of "harmful content, election integrity, privacy and data portability."

But Facebook's surveillance-based, targeted advertising business model is the problem. Harms to our privacy and elections are not inevitable — they are business decisions.

If Facebook stopped programming its algorithms to prioritize engagement, then incendiary, hateful and polarizing content would not be amplified (fear and anger "engage" humans the most, according to research). Prioritizing engagement is a business choice, as it keeps users on Facebook's platform to show them ads and collect their data.

If Facebook stopped collecting massive amounts of user data to feed its targeted advertising business model, then foreign agents could not interfere with elections by precisely targeting and manipulating Facebook users. Those seeking to influence elections use Facebook's surveillance architecture to identify users most susceptible to their messages.

A business model pivot away from targeted advertising may indeed be in Facebook's long-term financial interest. But because innovating in a way that would reduce surveillance runs counter to Facebook's profit motives, the FTC needs to impose remedies that require the company to innovate its business model.

How the FTC could protect consumers

Backed by the threat of trillion-dollar penalties in court, the FTC could prohibit Facebook from particular types of data collection. It could require the business to move from its current practice of tracking consumers in ways they would never expect to radical transparency. The FTC could require opt-in user consent for each purpose that Facebook collects data, with users given a real choice to not be tracked.

The FTC could unwind the WhatsApp and Instagram mergers as illegal under the Clayton Act, which prohibits mergers that may tend to create a monopoly. Breaking up the business in this way would minimize Facebook's scale — and the damage done — and would create competitors. Without meaningful competition, Facebook has been able to cause harm without having to worry about losing profits. Competition would give consumers and advertisers the ability to choose a social media platform with a less destructive business model.

The FTC could also prohibit Facebook from acquiring competitive threats going forward, or even prohibit all acquisitions until Facebook fixes the harms it is causing. Without such a prohibition, Facebook can simply acquire and kill innovative startups that could compete by offering greater privacy. At a bare minimum, the FTC should stop Facebook from integrating WhatsApp, Instagram and Facebook Messenger on a common infrastructure, which will only cement its monopoly power.

The FTC also could impose real interoperability requirements that allow competitors to emerge and securely communicate with the Facebook network, much like a phone on the Verizon network can communicate with a phone on the AT&T network. Interoperability would take away Facebook's nearly insurmountable competitive advantage of being the place where all of your friends already are. Zuckerberg's proffered solution of data portability — being able to take your data with you — does not reduce this barrier to competition.

Facebook's spying on citizens is a business choice, and the FTC allowing it to do so is a policy choice. It's past time for better choices and for innovation that improves democracy rather than unravels it.