Facebook
The tech behemoth brought in $15.08 billion in revenue, an increase of 26% from the $11.97 billion from the same time last year. However, due setting money aside for the one-time fine payment, its profit dropped by more than half to $2.43 billion in the first quarter.
Ever since the Cambridge Analytica scandal last year, the FTC has been investigating Facebook for its ethically dubious privacy regulations. The problem is, Facebook has been able to waive off the fine as a minor monetary setback that is taken out of its already-hefty profit: it does not permanently guarantee that the company will alter its privacy policies in the long term, as it can afford to keep incurring monetary losses.
To put things in perspective, even if Facebook were to incur a $5 billion fine (on the higher end of the spectrum), that is only 11% of the $45 billion in total cash and marketable securities Facebook has on hand. What's more is that $5 billion is what it makes on a quarterly basis, and that too if business is slow.
"Is this going to get their attention? It will get their attention to the extent that they're going to try to be more careful in the future," said Peter Henning, a law professor at Wayne State University and a former federal prosecutor. "But does it really deter violations? I think the answer to that question is no. For some companies, it's viewed as the cost of doing business."
In fact, Facebook's share price soared after its announcement on Wednesday, endowing the company with an additional $40 billion to its market capitalization.
The FTC could consider imposing fiscal penalties of a more ameliorative nature, such as requiring it to change its data privacy practices within a certain time limit. If Facebook fails to comply, the fine imposed could be more significant or more frequent.