It looks like a pretty nice outcome for CA, no persons involved are being hit with criminal charges, instead they're limited to just constraints on future actions - additionally CA has filed for bankruptcy and there is no initiative I can see in this order that goes after original investors as having conspired on these charges, so they'll lose their investment but that was probably a write off anyways.
Usually it would be recommended to FBI for legal review, and if they find that laws were broken, then referred to the DOJ for prosecution.
> we see over and over comments of the "omg no criminal charges"
If you committed a crime, whether violent or financial, then you should be prosecuted. It's disheartening to see government lawyers give away the candy store every time just so they can secure a "quick" negotiation and move on with their jobs.
Unless people have _real_ disincentives to break the law.. guess what? They're just going to break the law and hide behind their money for as long as we let them. This needs to change or we're going to experience the 1930s again.
They're known for imposing fines that are minuscule relative to the amount of damage whoever they're investigating caused. For most deceptive operations large enough to land on the FTC's radar, whatever fines they might end up paying are considered a speeding ticket and cost of doing business. It's sad, really. They're also known for being massively understaffed relative to the amount of complaints they receive.
So what is the difference between CA, corporate banks, etc that are corporations that "shield" the employees from personally facing criminal action, and me running out to file an LLC/SCorp/etc to do illegal activities myself? Is it purely the size of their bank accounts?
It's the size of an organization and the complexity of the enterprise. Large, sophisticated corporations effectively shield executives from personal criminal liability because decision making is more diffuse--or at least they have an easier time arguing that.
If a prosecutor could establish that a Fortune 500 CEO had the same, unmoderated role in criminal activity as the CEO of a one man shell company, then he'd be just as easy to prosecute and undoubtedly would--that'd make the careers of the D.A. and the attorneys working the case.
There aren't many (or any?) laws that criminalize scheming, amoral profiteers who effectively (but not literally) promote a culture of lawlessness. Even if you write them they'd be very hard to prosecute--Due Process protections are strong in the US and Anglosphere systems, at least if you have the money and wherewithal.
A bigger problem is that executives and board members are financially shielded, often through corporate-bought personal liability insurance. Maybe things would get better if there were laws mandating clawbacks, with independent agents[1] tasked with drafting the contracts and enforcing clawbacks, and perhaps somehow preventing executives from insuring themselves, such as with mandatory right of recourse clauses (i.e. insurer can always recover their payouts from the insured, making them more like guarantors). This aspect of corporate law is really complex though because it touches on so many subject areas. And stuff like this has been tried--it's how we ended up with corporate-bought personal insurance policies, a response to a brief period where executives and board members found themselves financially exposed during the early years of professional shareholder lawsuits.
[1] Even though technically this is supposed to be the responsibility of board members. But that's an even thornier problem.
Essentially, you're saying plausible deniability? "I'm the CEO of 100s to 1000s of employees. I can't possibly know the complete details of what all of them are working on"? If you're a CEO like Steve Jobs or the Zuck, then I would never ever ever buy that argument.
Plausible deniability + army of lawyers + crapshoot of a jury trial = risk averse prosecutors. Lower-level employees who play a more direct role do often get pinched. For example, in the Libor scandal.[1]
Prosecutors don't get dinged for being risk averse. And the same is true, to a lesser extent, for regulators. But attorneys who specialize in class action civil suits can't afford to be risk averse; they make payday by being aggressive and hunting out malfeasance, which is why business hates class actions. Corporate America has successfully systematically demonized "trial lawyers" the same way they demonized labor unions. Even the most anti-corporatist activists tend to assume trial lawyer lobbyists and labor unions are more corrupt than corporations, which is dubious to say the least. (As Jimmy Hoffa said circa 1959, "Twenty years ago the employers had all the hoodlums working for them as strikebreakers. Now we’ve got a few, and everybody's screaming." That doesn't excuse lawlessness, but it should effect how we allocate limited enforcement resources.)
IMO, if we want to restore balance we need to make it easier for victims and shareholders to pursue civil remedies independently, and strip executives and board members of some of their financial protections. This way we realign financial incentives in a manner that, hopefully, maximizes disincentives for cheating (i.e. executives have to watch their back for trial lawyer "sharks"), without having to literally make a federal case out of everything. It will be costly, but corporate malfeasance is already costly, it's just that those costs are hidden--at least quantitatively hidden; qualitatively we all see it. Importantly, these costs won't need to be borne by tax payers[2] (i.e. growing ever-despised federal bureaucracy), which isn't sustainable politically. That's another reason why the SEC, FTC, and others don't pursue malfeasance more aggressively--their staffs are tiny and ill-equipped to perform investigations. It's why the SEC heavily relies on automated, heuristic algorithms for detecting financial fraud; and why reporting requirements are so invasive. We're relying on computers for lack of human resources, but computers are only good at detecting the simple schemes, the reporting costs are regressive, and prosecutions favor small fry--the type of people that taxpayers can more readily identify with, which makes prosecutions seem unfair and predatory.
Corporate America pushes back so heavily on this stuff because for 40 years large corporations have slowly turned into accounting and financing firms, with manufacturing and services as side businesses. They basically specialize in aggressive accounting strategies, which makes them feel vulnerable. And because that's just how business is done these days, legislators and think tanks have internalized the notion that permitting more corporate and personal liability for harmful accounting and financing strategies will seriously harm the entire economy, at least as measured by GDP growth. And, to be honest, for a brief period it very well might, until corporate America shifts away from accounting gimmicks and more aggressively pursues other profit opportunities.
[1] As an engineer I pitch myself to managers as someone who "gets things done". I'm an ask for forgiveness, not ask for permission kind of worker. And I assume many on HN are the same way, both in IT and other industries. So I don't doubt that executives often lack deep insight into the technicalities of various schemes. And in criminal law especially, personalknowledge of the technicalities is often a crucial element of liability.
[2] Hopefully most costs will be principally borne by the wealthy. But to the extent they're borne by consumers through higher prices or less choice, they'd be largely hidden, which is a good thing, because consumers and taxpayers aren't very good at judging long-term tradeoffs. If we can agree democratically that corporate malfeasance needs to be aggressively addressed, then let's just use the best strategy--the one corporate interests have the least ability to capture and disassemble.
The FTC has the ability to recommend charges and often will name and shame involved parties - additionally the FTC could extend the liability for these fines to the backers of CA if they chose to and that'd honestly send a ridiculously strong message - investing in something this shady should really break out of the standard liability agreements of a corporation and extend to personal assets. If the investors behind CA were aware of the shady business CA was trying to do (and all signs point strongly to yes in this case) then they conspired. If they conspired they should be prosecuted accordingly and this seems like a good and easy charge to press.
They could potentially refer, but they would at best be referring for further investigation since many of the investigative tools necessary to pursue individual criminal indictments are not available to them. The FTC is limited to administrative powers and can take civil actions -- that's it. As far as going after investors for fines, I've never heard of such an attempt by the FTC against backers of an LLC, and I suspect that would be tied up in courts and legally inviable. It's nice to fantasize about regulators making these kinds of smackdowns, but their real world powers are quite limited by statute and case law.
The way I heard the story, Alexander Nix was a chronic exaggerator who pushed the narrative that CA had a huge impact on Brexit and other elections when it simply wasn't true. He did this in order to gain more sales. They said the Facebook data was deleted by the time of the Trump campaign.
My theory is that they are not so different than a typical digital ad agency but they got caught up in a political tornado. I think we should at least be open minded to the possibility they have been scapegoated here.
It is possible Nix made all that up as a weird form of bragging to close a sale to a sleazy customer. I couldn't find any actual evidence to the contrary. This isn't my theory, it is literally what a CA employee told me in person.
I'd be interested in seeing an unanimous FTC ruling on Barack Obama's campaign downloading and mining the entire Facebook social graph in 2012, with Facebook's implicit consent. And unlike the Trump campaign, Obama's did use this data for more than just winning the primary. It went something like this: you downloaded an app on FB and that app would grab not just your data, but also _that of your friends_. FB turned the blind eye. Nary a word from the press, too.
The FTC's basis for this ruling against Cambridge Analytica is that they deceived users about what data was being gathered and how it was being used in order to get access. The 2012 Obama campaign didn't. Now that's not to say that they had any sort of consent from the people they were gathering information from - they clearly didn't, because they were scraping information about friends just like CA - or that what they were doing wasn't creepy and morally dubious. It just means that the reasoning in this opinion doesn't apply.
In fact, they don't seem to allege that CA committed any kind of violation by scraping the data of US friends of people who used their app, precisely because those users didn't consent. Their argument is that CA breached the FTC Act by making false or misleading representations to get people to give them access to their data, but they can't stretch that to cover scraping of their friends' data because those friends never agreed to anything and CA made no promises to users about their friends.
But it kinda did, tho. I really doubt the users understood the full extent of the data they were _actually_ sharing, and particularly that this data included data of all their friends as well.
This is basically whataboutism. If you agree with the principle you should be calling for the people in CA to be personally culpable (and their investors and customers, who knew full well what they were doing). If you disagree, make an argument as to why the principle is wrong.
"you should be calling for the people in CA to be personally culpable"
I am all for it. But let's follow first come first served and start punishing the earlier perpetrators first.
What you call "whataboutism" is simply people's natural feel for justice. When you advocate punishment make sure it applies EQUALLY TO EVERY ENTITY GUILTY. If not then people will start pointing fingers and quite rightfully. It is not them being "whataboutists". It is you behaving like/protecting a hypocrite.
False equivalence applies here. Barack Obama did not hire a foreign agency to accept laundered intelligence from a hostile foreign intelligence agency to target American voters for disinformation and propaganda to materially affect an American election.
It's not illegal for American companies, complying with American election regulations, to be hired by an American campaign to help with an American election.
It's very illegal and fundamentally a Constitutional crisis to involve foreign firms and foreign militaries in your campaign, however. Our founders discussed this in the Federalist Papers and elsewhere, how protecting our elections from foreign influence was of the most important parts of maintaining soverignity (and helps understand precisely what we lose when we legitimize Donald Trumps work with foreign militaries to attack our own country by limply comparing it to non-equal and legal counter examples).
It has never happened in our entire history, that a candidate for office would work with foreign firms and hostile militaries to attack our own elections. Well, until 2016.
Whataboutism is a perfect description of your tactic: a rhetorical trick to create false equivalence to hide far greater crimes under the guise of "everyone does it"
This is what early stage regulatory capture looks like. Now that some token bad actors have been called out, we can go back to ignoring the elephant in the room of the too-big-to-fail surveillance companies keeping databases that would make the staunchest Stasi agent blush.
