Sometimes, if you're Facebook, even bad news isn't so bad after all. If you're a Facebook user, on the other hand, you might want to pay attention, because there's a good chance that this one will matter to you.

Fellow Inc. contributor, Bill Murphy Jr., wrote over the weekend about how the FTC and Facebook have entered into a settlement over a variety of investigations into privacy concerns, and how this is very good news for the company even though it will pay $5 billion in penalties. In fact, it's such good news that the company's stock price went up.

The FTC has broad powers to punish repeat offenders, and it appears investors were afraid that once the commission reopened investigations that started back 2012, the penalty might be high enough to force the company to actually change.

Any significant change could have easily reduced its long-term profitability. Instead, it pays a fine and moves on. Amazingly, it's the largest penalty ever imposed by the FTC, far exceeding a $22.5 million fine levied against Google over charges it represented privacy guarantees to users of Apple's Safari browser. 

But Facebook was already expecting that.

In fact, Facebook had already set aside cash for the anticipated penalty. They had factored it into the cost of doing business. Why? Because business is good if you're Facebook, and it's far more lucrative to continue to soak up as much information about people and then use that information to sell them ads. 

Even a $5 billion penalty doesn't change that equation.

Nothing really changes.

Reporting by The Wall Street Journal and others indicate that the settlement will likely include government-imposed conditions to determine how Facebook handles the personal information of its users, though it's unclear what that will look like, or what effect if any, it will have.

The size and scope of Facebook mean that there is no business model that will ever be more lucrative for the company than selling advertising to its users. As long as that's the equation, the rest of it is just math.

Sure, $5 billion is a lot of money. In fact, it's about a month's worth of revenue for the company. But the fact that investors were actually relieved at that dollar amount shows you that it's hardly a large enough fine to actually hurt the company enough to change.

Instead, the government could have extracted strict concessions around what type of information Facebook is allowed to collect, and how it can use that information. And, considering that the case was related to the Cambridge Analytica scandal that revealed how lax Facebook's protection of your data really is, the FTC could have imposed much harsher standards for Facebook's data sharing with the apps and developers who use its platform.

Or, Facebook's founder, Mark Zuckerberg, could have been required to loosen up his grip so that shareholders and users would have a greater say in how the company handles the balance between information and privacy.

But none of those things happened, which just shows you why people not only don't trust Facebook, but they don't trust the government to do anything about it when companies step over the line. 

Mark Zuckerberg still has a job, and the machine he created keeps rolling down the same path it has been. That means that there will continue to be a conflict between Facebook's interest in gathering as much information as possible, and users' interest in how their data is being used and protected. 

Just do the right thing.

I'll conclude with this. This is a problem the government shouldn't have had to solve, especially since most of the time, regulators put on a good show of taking a tough line with large dollar signs, but nothing really happens.

Still, as a business, it's your responsibility to do the right thing, even when it might hurt a little. Respecting your users and their personal information isn't even that hard, it's just not as profitable as exploiting it for profit. But even that has a cost--in trust.

As a business owner, it's up to you to consider the cost associated with losing that trust because trust is one thing you can't buy. Even for $5 billion.

Published on: Jul 15, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.