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In February, the Washington Post’s Tony Romm reported that Facebook is negotiating a settlement with the Federal Trade Commission. The company signed a consent decree with the FTC in 2011 in which it promised to improve its privacy practices. The settlement, he reported, would include a multibillion-dollar fine. At the time, Facebook had no comment. But in an unusual move today, the company essentially confirmed the report as part of its quarterly earnings statement.

Nick Statt reports:

The company posted first quarter earnings today for 2019, highlighting its continued monthly and daily active user increases and a 26 percent increase in year-over-year sales, up to $15.1 billion and ahead of Wall Street expectations. But Facebook also says it is setting aside $3 billion, or roughly 6 percent of its cash and marketable securities on hand, for the FTC fine that is coming down the pipeline at some point, likely later this year. “In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices, which accrual is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet,” the company writes in its earnings statement. “We estimate that the range of loss in this matter is $3 billion to $5 billion. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”

On an earnings call, the company said the $3 billion figure was at the low end of its expectations for a fine. Ashkan Soltani, who used to work at the FTC, suggested that Facebook might have taken the unusual step of pre-announcing a fine as a negotiating tactic — anchoring the price at a level that the company finds acceptable, while discouraging regulators from asking for any more.

In The Information, Ashley Gold compares a potential $3 billion fine to some of the other big speeding tickets issued against tech companies. It would be exponentially bigger than the biggest fine issued by the FTC to date — $22.5 million, against Google in 2012. But it would be smaller than European actions against Big Tech. The EU issued a $15.3 billion fine against Apple in 2016, for tax evasion; and a $5 billion fine against Google last year, for antitrust issues. And it would pale next to fines levied against banks — such as the $16.7 billion fine the Justice Department issued against Bank of America in 2014 for defrauding consumers during the financial crisis.

Some lawmakers expressed dismay that the proposed fine against Facebook seemed rather low. “A predicted $3 billion seems paltry compared to $15 billion in profits last quarter,” Sen. Richard Blumenthal (D-CT) tweeted. Investors, on the other hand, were excited: Facebook stock rose after reporting a very good quarter, and added $40 billion or so to its market capitalization.

All of which raises the question: what would be an appropriate enforcement action for the US government to take against Facebook over the Cambridge Analytica data privacy scandal, which precipitated this latest inquiry? ‘

As best as I can tell, the FTC rarely lays out a rationale for how it arrives at fines. And the Cambridge Analytica scandal was deeply strange, as I never tire of reminding people. Most of its details had been known for the better part of two years when the story broke; Facebook had long since shut down the API access that Cambridge Analytica abused; and the resulting harm to consumers was unclear. (The idea that Cambridge Analytica’s ill-gotten psychographic profiles of voters swayed the election, while explosive, doesn’t seem to have swayed many political scientists.)

But the FTC’s inquiry is taking place at a time when a vocal minority of Americans are calling for tech platforms to face real consequences after years of data leaks and breaches. The agency is also facing pressure to act from Congress, who have rightly slapped the agency for its institutional bias toward inaction.

On the surface, a $3 billion fine looks like a win to both the FTC and Facebook. For the agency, the move will inspire a round of headlines about its “largest fine ever,” and allow it to push back on the idea that it’s an office full of empty suits. For Facebook, those same headlines will convey a welcome sense that the company is being held accountable for its past misdeeds, while simultaneously costing it a meaningless amount of money.

It’s also possible that the fine could come with new restrictions on how Facebook collects or uses data, but I would be surprised if any of them required the company to change how it does business. The 2011 consent decree was, in essence, a pinky promise that the company would do better to protect our privacy. And then predictive technology got so good that companies can now infer our behavior while knowing almost nothing about us, rendering many 2011-era privacy concerns quaint.

In such a world, a trivial fine over what is essentially a moot point can’t help but look a little ridiculous. Some day, tech companies may face accountability for real. In the meantime, what they’re facing looks a lot like theater.

Democracy

Twitter Is Not America

Alexis Madrigal reports on a new Pew study that identifies differences between the average Twitter user and the average American.

In the United States, Twitter users are statistically younger, wealthier, and more politically liberal than the general population. They are also substantially better educated, according to Pew: 42 percent of sampled users had a college degree, versus 31 percent for U.S. adults broadly. Forty-one percent reported an income of more than $75,000, too, another large difference from the country as a whole. They were far more likely (60 percent) to be Democrats or lean Democratic than to be Republicans or lean Republican (35 percent).

Indian court moves to lift ban on Chinese video app TikTok

TikTok can return to app stores in India, Aditya Kalra and Sudarshan Varadhan report:

Earlier this month, the court in the southern state of Tamil Nadu ordered the federal government to prohibit TikTok downloads, saying the app was encouraging pornography and could expose children to sexual predators. Acting upon subsequent instructions from the federal IT ministry, Apple Inc and Alphabet Inc’s Google last week removed TikTok from their Indian app stores.

Facebook Says First-Person Christchurch Video Foiled AI System

Nate Lanxon covers a hearing of British lawmakers who are conducting an inquiry into hate speech. Google and Twitter also attended.

Facebook said it struggled to identify the video of the New Zealand mosque shootings because of the use of a head-mounted camera by the gunman, which made it harder for its systems to automatically detect the nature of the video. […] Terror footage from a first-person perspective “was a type of video we had not seen before,” he added. Because of the nature of the video, Facebook’s artificial intelligence – used to detect and prioritize videos that are likely to contain suicidal or harmful acts – did not work.

NZ and France seek to end use of social media for acts of terrorism

New Zealand Prime Minister Jacinda Ardern and French President Emmanuel Macron will meet in Paris next month to discuss the use of social networks to promote terrorism.

“The March 15 terrorist attacks saw social media used in an unprecedented way as a tool to promote an act of terrorism and hate. We are asking for a show of leadership to ensure social media cannot be used again the way it was in the March 15 terrorist attack,” Jacinda Ardern said. “We’re calling on the leaders of tech companies to join with us and help achieve our goal of eliminating violent extremism online at the Christchurch Summit in Paris.

In Push for 2020 Election Security, Top Official Was Warned: Don’t Tell Trump

“As homeland security secretary, Kirstjen Nielsen became increasingly worried about Russian attempts to influence the 2020 election,” the New York Times reports. “But she couldn’t discuss it at high-level White House meetings.”

In a meeting this year, Mick Mulvaney, the White House chief of staff, made it clear that Mr. Trump still equated any public discussion of malign Russian election activity with questions about the legitimacy of his victory. According to one senior administration official, Mr. Mulvaney said it “wasn’t a great subject and should be kept below his level.”

Sri Lankans Adapt to Social-Media Shutdown as Government Holds the Line

Newley Purnell and Eric Bellman explore how the social network ban in Sri Lanka is playing out on the ground:

One of the hardest-hit churches—St. Sebastian’s church which lost more than 100 worshipers in the attack—decided to use a VPN to post photos of the destruction on its Facebook page to ask for help and prayers. “I just got a VPN because all social media is blocked,” said the Rev. Edmond Tillekeratne, social communications director for the Archdiocese of Colombo. “The truth has to go out.”

Misinformation doesn’t have to be altered to go viral

Daniel Funke examines how hoaxsters re-post old-but-true information with new captions or contexts to turn them into viral misinformation:

Fact-checkers across Europe debunked several out-of-context news articles following the fire, which produced a torrent of hoaxes on social media. Spanish fact-checking site Maldito Bulo wrote about how people were sharing an El Mundo story about four people being detained near Notre Dame. That story is factual — but it occurred in 2016. And social media users were sharing it as if it had happened in the aftermath of the Notre Dame fire.

Elsewhere

The Dirty Dozen 2019 (PDF)

Facebook made the National Council for Occupational Safety and Health’s list of 12 employers who put workers and communities at risk for the first time. The report cites “The Trauma Floor,” my recent investigation into working conditions at a content moderation site in Phoenix, and a subsequent interview I did with NPR.

You might hate it, but Facebook Stories now has 500M users

Here’s a surprise from Facebook’s earnings call. I’d love to know who these users are — today seven of my 1,474 Facebook friends had a story posted, or less than half of 1 percent.

Facebook while black: Users call it getting ‘Zucked,’ say talking about racism is censored as hate speech

Jessica Guynn reports that black Facebook users are sometimes locked out of their accounts when discussing racism on the platform. (Posts that denigrate “white people” aren’t allowed.)

Many of these users now think twice before posting updates on Facebook or they limit how widely their posts are shared. Yet few can afford to leave the single-largest and most powerful social media platform for sharing information and creating community. So to avoid being flagged, they use digital slang such as “wypipo,” emojis or hashtags to elude Facebook’s computer algorithms and content moderators. They operate under aliases and maintain back-up accounts to avoid losing content and access to their community. And they’ve developed a buddy system to alert friends and followers when a fellow black activist has been sent to Facebook jail, sharing the news of the suspension and the posts that put them there.

The Gentle Side of Twitch

Nicole Carpenter explores the people who are using Amazon’s Twitch to watch something other than video games:

Most streams are focused primarily on video games, but there are also streams from musicians, knitters, storytellers, makeup artists, scientists, and photographers. There are streamers sewing costumes, snapping together LEGO bricks, and creating digital paintings of their favorite characters. Streamers like these have been on Twitch since the beginning, but the platform officially recognized these broadcasts under the “Creative” banner when it launched the new vertical in October 2015. It was kicked off with a week-long marathon of Bob Ross’ The Joy of Painting, setting a standard for what the Creative channels could be.

Launches

Bumble’s ‘private detector’ AI will automatically detect and blur lewd images

OK, so how do I disable this?

Bumble is launching a “private detector” feature that can automatically detect lewd images with AI and warn users about the photo before they open it. Users can then decide if they want to view, block, or report the image to moderators. The feature is part of a safety initiative from Bumble’s co-founders, and it’ll also come to the apps Badoo, Chappy, and Lumen — which are all part of the same dating group parent company — starting in June.

Takes

I Used to Work for Google. I Am a Conscientious Objector.

Jack Poulson, who quit Google over Project Maven, says the tech industry needs more collective worker action:

Direct action from tech workers has been undeniably effective. Human rights organizations must therefore continue to advocate the legal protection of whistle-blowers and conscientious objectors, including protecting the organizing required for an effective collective action. Further, the broader civil society could increase the frequency of whistle-blowing by creating a dedicated legal defense fund. Tech companies are spending record amounts on lobbying and quietly fighting to limit employees’ legal protections for organizing. North American legislators would be wise to answer the call from human rights organizations and research institutions by guaranteeing explicit whistle-blower protections similar to those recently passed by the European Union. Ideally, they would vocally support an instrument that legally binds businesses — via international human rights law — to uphold human rights.

And finally ...

Mark Zuckerberg has a podcast now

Technically it’s just audio-only recordings of the two interviews he has done this year as part of his personal challenge. Still, I have hope for host-read ads.

Talk to me

Send me tips, comments, questions, and FTC fines: casey@theverge.com.