Can Washington keep watch over Silicon Valley? The FTC’s Facebook probe is a high-stakes test.

Nearly a year after announcing an investigation into the incident, the Federal Trade Commission is negotiating with Facebook over a fine that could range into the billions of dollars. Experts say the government has to seize on the opportunity to send a message -- to Facebook and its peers -- that it hears consumers’ frustrations and is willing to challenge the tech industry’s data-collection practices. "The Facebook inquiry is a basic test of the credibility of the FTC to be an effective privacy enforcement agency," said William Kovacic, a former Republican commissioner who now teaches at George Washington University. “Anything other than a significant penalty will be seen as a form of policy failure and will really impede the agency's ability to function in the future.” 

Even if the FTC can’t broker an agreement with Facebook over fines and other punishments, privacy advocates have urged the agency to stand its ground -- and take the company to court. Such a legal war could prove brutal for both sides, pitting an agency with limited staff and a meager $306 million budget against a corporate behemoth that took in $55.8 billion in revenue in 2018. Adding to the pressure, the FTC generally runs the risk that an adverse court ruling in a landmark case could jeopardize the very nature of the agency’s authorities to police companies for privacy and security breaches.