Twitter Fined up to $250 Million by the FTC

[zeusthemoose]

Summary

 On Monday, Twitter said that they might be fined up to $250 million by the Federal Trade Commission. Twitter has already set aside $150 million but expects the fines to reach up to $250 million.

 The FTC is fining Twitter for misuse of personal information. The investigation began October 2019 after the FTC discovered that emails and phone numbers kept by Twitter for 2 factor authentication were also being used for targeted advertising. This is a violation of the 2011 agreement that Twitter had with the FTC that restricted Twitter from "misleading people about the measures it took to protect their security and privacy" (New York Times) for the next 20 years (11 remaining).

 Twitter is saying that advertisers were allowed to target ads to specific audiences and "may have matched people on Twitter to their list based on the email or phone number the Twitter account holder provided for safety and security purposes" (Twitter Statement). They are claiming that this was all an accident and they do not know how many users were affected.

 While the 2011 agreement was caused by a number of hacks similar to the recent bitcoin one, the most recent hack is in no way related to this fine.

 

Quotes

Quote

Twitter said on Monday that it was under investigation by the Federal Trade Commission for potentially misusing people’s personal information to serve ads, adding that it faced fines of $150 million to $250 million.

In a corporate filing, Twitter disclosed that the F.T.C. began the investigation last October after it had linked a database of its users’ personal information, which it had for security purposes, with a system used by advertising partners.

The action, which Twitter said was inadvertent, may have violated a 2011 agreement that the company signed with the F.T.C. over consumer privacy. At the time, Twitter had agreed to a settlement with the agency after hackers had gained administrative control of the social media service on multiple occasions. Under the agreement, Twitter was restricted from misleading people about the measures it took to protect their security and privacy.

An F.T.C. spokeswoman declined to comment on the investigation.

Brandon Borrman, a Twitter spokesman, said the company was contacted by the F.T.C. after it reported quarterly financial results on July 23. The investigation was disclosed in accordance with “standard accounting rules” and was included in a filing with the Securities and Exchange Commission, he added.

 

Twitter encourages people to provide their phone numbers so that it can add a second step to the login process, called two-factor authentication, which ensures that users receive a text message before gaining access to their own account. But the phone numbers also ended up in a system that allowed advertisers to tailor their ads to specific audiences, the company said. It was unclear how many people were affected, Twitter said.

“When an advertiser uploaded their marketing list, we may have matched people on Twitter to their list based on the email or phone number the Twitter account holder provided for safety and security purposes,” the company said in an October blog post that disclosed the incident. “This was an error and we apologize.”

(New York Times)

 

My thoughts

 This will be interesting to watch and see how much they get fined. Even if it is the whole 250,000,000 that is tiny compared to the 5 billion that Facebook paid last year. I highly doubt this was an accident and it makes me glad I dont have a twitter account.

 

Sources

 FTC Document Explaining Fine

 Twitter Statement

 The New York Times

 CNBC

 The Verge

[RejZoR]

Quote

Twitter has already set aside $150 million but expects the fines to reach up to $250 million.

So, they are literally knowingly abusing personal information to sell shit and they just set piles of cash "aside" because that's just a casual Tuesday for them. And then they continue doing the same shit. Because they damn know they'll earn way more than 250 million in the long run from doing this shit.

 

Fines are suppose to be something that changes their behavior because they would be too expensive to pay up. Clearly that's not the case and all these fines are just minor inconveniences... Good thing I left this dumspterfire platform full of whining Karens and arbitrary ToS rules that apply to some but not to others. And guess what, I don't miss it at all. Did have few cool people there, but other than that it's a garbage place.

[The_russian]

27 minutes ago, zeusthemoose said:

This is a violation of the 2011 agreement that Twitter had with the FTC that restricted Twitter from "misleading people about the measures it took to protect their security and privacy" (New York Times) for the next 20 years (11 remaining).

 

This just boggles my mind. So the only reason that they aren't lying to their users about security measures is because of an agreement? And a 20 year agreement at that, so once the time is up they can just freely lie to their users? Yeah... glad I don't use Twitter. 

[Bombastinator]

Interesting.  250 million is a quarter of 1 billion.  What kind of profit does twitter make? If a fine doesn’t hurt enough to prevent a behavior it doesn’t do anything to prevent a behavior.  One problem I’ve seen repetitively lately is governments levying fines against corporations so small that they do nothing.  One famous example is 3.2 beer.  It’s a sort of dumb law but a few states have a law that 3.2% alcohol beer is easier to sell than standard 5% beer.   The higher water/alcohol ratio is enough to keep people from getting falling down drunk.  Usually it’s for sports stadiums so the fans don’t get too drunk.  For some years now many beer companies have simply been making only 5% beer, selling it as 3.2% and paying the fine, because while 3.2% beer isn’t any harder to make, paying the fine was cheaper than another production line, and it was still profitable.  Fines that don’t change behavior are useless. 

[thorhammerz]

45 minutes ago, Bombastinator said:

Interesting.  250 million is a quarter of 1 billion.  What kind of profit does twitter make? 

Twitter does not generally generate a profit, cute financial engineering notwithstanding. That being said, their revenues in 2019 were in the 800MM to 1,000MM ballpark, per quarter (slash that by some 25-40% for 2020).

 

Which means the fine effectively translates into a cost of sales (e.g. how much money spent to get a dollar back) of 250MM, (effectively amortized) over the past 10 (or however many it gets to by the time the FTC drops the wrist slap) years twitter has been monetizing data they should not have been monetizing.

[Bombastinator]

6 minutes ago, thorhammerz said:

Twitter does not generally generate a profit, cute financial engineering notwithstanding. That being said, their revenues in 2019 were in the 800MM to 1,000MM ballpark, per quarter (slash that by some 25-40% for 2020).

 

Which means the fine effectively translates into a cost of sales (e.g. how much money spent to get a dollar back) of 250MM, (effectively amortized) over the past 10 (or however many it gets to by the time the FTC drops the wrist slap) years twitter has been monetizing data they should not have be monetizing.

The implication of the 150mm growing to 250mm implies twitter doesn’t find the fine big enough to stop what it’s doing.  Might be other things, but such a thing is supposed to bother other companies doing the same thing enough for them to stop too.  It looks from her (though I could be wrong) that the fine is so low twitter isn’t even going to bother stopping.

[thorhammerz]

2 minutes ago, Bombastinator said:

 It looks from her (though I could be wrong) that the fine is so low twitter isn’t even going to bother stopping.

Which is why I frame the fine as a cost-of-sales input... because large companies treat most regulatory wrist-slaps as merely that.

[zeusthemoose]

35 minutes ago, Bombastinator said:

The implication of the 150mm growing to 250mm implies twitter doesn’t find the fine big enough to stop what it’s doing.  Might be other things, but such a thing is supposed to bother other companies doing the same thing enough for them to stop too.  It looks from her (though I could be wrong) that the fine is so low twitter isn’t even going to bother stopping.

I believe the 150 to 250 range was the FTC not fully knowing what they could/should fine instead of it being 150 now and growing another 100 as twitter keeps doing this. Twitter made it seem like they stopped doing it when it was first “discovered” at the beginning of this investigation, but honestly they are most likely doing something else equally as bad that hasn’t been discovered yet.

Twitter’s official stance was that it was an accident and they did not mean to give this data to advertisers.

Edited August 4, 2020 by zeusthemoose

[Bombastinator]

1 hour ago, huilun02 said:

Basically "pay up if you want to continue doing the lucrative bad things u do"

 

Every govt basically doing the same to <insert tech giant>

It might matter if they were asking for real money.  A billion is a thousand million and a trillion is a thousand billion.  Even a quarter billion has little effect on government.  The only real purpose these finds have is curbing bad behavior.  

[Bombastinator]

1 hour ago, zeusthemoose said:

I believe the 150 to 250 range was the FTC not fully knowing what they could/should fine instead of it being 150 now and growing another 100 as twitter keeps doing this. Twitter made it seem like they stopped doing it when it was first “discovered” at the beginning of this investigation, but honestly they are most likely doing something else equally as bad that hasn’t been discovered yet.

Twitter’s official stance was that it was an accident and they did not mean to give this data to advertisers.

Like “oops” huh?  My sister works for the IT section of a bank.  Banks still have real rules.  They have an entire division Called “compliance” to make sure they don’t break any.  There is no “oops”.

[realpetertdm]

Quote

the FTC discovered that emails and phone numbers kept by Twitter for 2 factor authentication were also being used for targeted advertising.

Using 2FA data for advertising, seriously

 

I enabled 2FA to keep my bloody account secure, not to have twitter use my shit for ads

[Trik'Stari]

I have to ask.

 

Are people not trained at a young age "do not click on ads" anymore? That was one of the first things I learned when the internet started becoming more popular in the early 2000's. I feel like if people stopped clicking on them, they would simply go away. And then shit like this wouldn't happen.

[cj09beira]

20 minutes ago, Trik'Stari said:

I have to ask.

 

Are people not trained at a young age "do not click on ads" anymore? That was one of the first things I learned when the internet started becoming more popular in the early 2000's. I feel like if people stopped clicking on them, they would simply go away. And then shit like this wouldn't happen.

if ads go away you will have to start to directly pay for most sites you use, which doesn't seem like a better system

[Bombastinator]

2 hours ago, huilun02 said:

You and I know this bad behaviour isn't going to stop if paying a sum allows them to continue doing it.

 

Want it to really stop? Outlaw it.

 

Do what it takes to ensure results. There is no two way about this.

It already is.  The fine is the law taking action.

[sof006]

They need to be fined a much much higher amount, put it into the billions. 

[Blade of Grass]

2 hours ago, huilun02 said:

Question..

How do websites start out?

Is webhosting so prohibitively expensive that websites start out by shoving tons of ads at visitors?

What is the reason for people going to those websites in the first place?

 

Is having ads on the site actually a necessity? Or is it simply out of greed?

Well that really depends on the website, right? What the website does, and the volume of traffic it receives, are both "inputs" into calculating how expensive a website is to run, so only with those values can you really know how expensive a site is to run. 

 

Sites like Google, even from their inception, was expensive to run (because the PageRank algorithm is expensive to run on a graph the size of the internet). 

Sites like Facebook or Twitter would be relatively cheap at inception to run, since their sites aren't exceeding computationally expensive.

But as any site scales to having millions of users the systems they design and build inherently must grow larger and more complex, which yes, is quite expensive. For example, if we wanted this technology forum to grow to 1/1000 the size of FB or Twitter, large swaths of the forum software would have to be entirely rewritten, and the forums infrastructure would have to be made far far more robust.

[soldier_ph]

Another day another lawsuit. Well I only hope that they didn't do shady stuff with my E-Mail and Phone Number ! 

[Bombastinator]

7 minutes ago, Pascal... said:

Another day another lawsuit. Well I only hope that they didn't do shady stuff with my E-Mail and Phone Number ! 

That ship seems to have sailed.  Apparently years ago.

[soldier_ph]

Just now, Bombastinator said:

That ship seems to have sailed.  Apparently years ago.

Well I've only got Twitter for roughly a year now. 

[Bombastinator]

Just now, Pascal... said:

Well I've only got Twitter for roughly a year now. 

Hmm.  Might have come in after they “stopped”. If they did.

[soldier_ph]

Just now, Bombastinator said:

Hmm.  Might have come in after they “stopped”. If they did.

Well I freaking hope so.

[Bombastinator]

Just now, Pascal... said:

Well I freaking hope so.

“Hope springs eternal” as the saying goes.  Some sort of announcement will probably be made.  For myself I’m merely glad I never used the thing.  Might not make any difference of course.  

[Trik'Stari]

5 hours ago, cj09beira said:

if ads go away you will have to start to directly pay for most sites you use, which doesn't seem like a better system

To be honest I'd find that preferable on things like reddit. Twitter I don't use so... Meh? Recently I tried it again and discovered what a horrific cesspool it is. Worse than any YouTube comment section. 

[Bombastinator]

15 minutes ago, Trik'Stari said:

To be honest I'd find that preferable on things like reddit. Twitter I don't use so... Meh? Recently I tried it again and discovered what a horrific cesspool it is. Worse than any YouTube comment section. 

I’ve never been tempted by twitter.  Reddit some but it has obnoxious signup requirements.  What’s irritating is some asshat in another country signed up on Twitter with some of my user data and I had to shut them down so I may have gotten abused without ever even having used twitter.

[poochyena]

13 hours ago, RejZoR said:

they are literally knowingly abusing personal information to sell shit and they just set piles of cash "aside"

i'm assuming the money was saved once the lawsuit began, not in anticipation of a lawsuit.