If you want a measure of the problem society will have in controlling the tech giants, then ponder this: as it has become clear that the US Federal Trade Commission is about to impose a fine of $5bn (£4bn) on Facebook for violating a decree governing privacy breaches, the company’s share price went up!

This is a landmark moment. It’s the biggest ever fine imposed by the FTC, the body set up to police American capitalism. And $5bn is a lot of money in anybody’s language. Anybody’s but Facebook’s. It represents just a month of revenues and the stock market knew it. Facebook’s capitalisation went up $6bn with the news. This was a fine that actually increased Mark Zuckerberg’s personal wealth.

But what it has exposed once and for all is a company that is out of control on a global scale. The investigation was launched in March 2018 after the Observer’s Carole Cadwalladr revealed that the political consultancy Cambridge Analytica improperly harvested the private information of more than 50 million Facebook users. In 2012, Facebook had made a deal with the FTC – a consent decree – to protect user privacy.

Facebook to be fined $5bn for Cambridge Analytica privacy violations – reports Read more

What the surging share price reflects is the unconscionable profitability of the tech business when it reaches the scale at which these companies operate. For regulators, this should be a wake-up call. Controlling tech companies can’t be done by fines alone. Regulators have to hit them where it really hurts. In the case of the two leading practitioners of surveillance capitalism, Google and Facebook, this means adopting a wide-spectrum approach. There is no silver bullet.

First, regulators need to focus on these companies’ capacity to hoover up and monetise the data they extract from their users’ online behaviour. Since much of this data has been accumulated in a lawless (or at any rate law-free) environment and it now constitutes their most valuable asset (not to mention the insuperable barrier to entry for potential competitors), Google and Facebook should be obliged to make the data available to other organisations (including in the public sector) under controlled conditions.

Second, given that the entire digital industry runs on data, competition authorities ought to be much more sceptical about the acquisition strategies of digital giants. With the 20/20 vision of hindsight, for example, Facebook ought never to have been allowed to acquire WhatsApp and Instagram. The mistake was to believe that these were distinctly different entities, whereas in fact they were all data companies. Nothing comparable in the media industry would have been allowed, or indeed in many other areas of industrial life. Equally, Google should never have been allowed to buy YouTube, and it should now be compelled to hive it off as a separate outfit.

Third, competition authorities should put the opaque, high-speed data-trading marketplaces owned and operated by Google and Facebook under the microscope – as the UK’s Competition and Markets Authority now intends to do. In no other area of industrial life would companies be allowed to be operators of such vast and entirely opaque marketplaces. As in many others areas of life, sunlight can be a good disinfectant.

Finally, the perennial bluff of the surveillance capitalists – that they are indispensable agents of innovation – should be called. Much of this “innovation” has come from their acquisition of creative startups rather than the ingenuity of their internal talents. Their standard procedure from the outset has been to acquire potential disruptive startups before they are able to scale up. We need to wise up to this strategy and make it harder to pull off. Fines are a necessary but not sufficient way of getting this rogue industry under democratic control.

• John Naughton is professor of the public understanding of technology at the Open University