I’m just waiting to read a news report that goes something like this:
MegaCorp Inc. announced that it reached a settlement with Big Government Agency over certain widespread practices that the government said were deceptive and harmful. MegaCorp will pay $100 million, but it denies that it did anything wrong, ever. In addition, BGA has agreed to pretend that MegaCorp’s allegedly deceptive practices never happened, and will send Mega’s CEO a muffin basket with a nice card apologizing for any inconvenience or hurt feelings that it caused.
This just seems like the next logical step in the trend of government agencies tripping over themselves to make sure that corporate targets can save face. Last week–in what appears to be a new practice–Google Inc. and Facebook Inc. were each allowed to settle actions by the Federal Trade Commission while explicitly denying allegations that they violated consumer privacy laws. (I’ve got to hand it to the FTC for making the Securities and Exchange Commission, with its “neither admit nor deny” settlements, look like a pit bull.) Apparently, the traditional language used for FTC settlements–that the agreement isn’t an admission of wrongdoing–was viewed by Google and Facebook as way too draconian.
These concessions to Google and Facebook hit a nerve with FTC Commissioner J. Thomas Rosch, who penned dissents in both cases. “I just went ballistic,” the former Latham & Watkins partner told me. “I thought it was terrible that they be allowed to deny liability.” In his Facebook dissent, Rosch maintained that FTC rules don’t even allow for such denials. Instead, under the agency’s rules, a settlement can state that the agreement “does not constitute an admission by any party that the law has been violated as alleged in the complaint.” But a party can’t flat out deny the allegations, Rosch maintains.
In his Google dissent, Rosch seemed even more upset, given that the FTC had previously charged Google with deceptive conduct, and the company is paying a record $22.5 million. “There is no question in my mind that there is ‘reason to believe’ that Google is in contempt of a prior Commission order,” he wrote. “However, I dissent from accepting this consent decree because it arguably cannot be concluded that the consent decree is in the public interest when it contains a denial of liability.”
I agree with Rosch. These “denial settlements” smack of Orwellian doublespeak, where words lack any true meaning. When those who are accused of violating the law are allowed to deny any wrongdoing while at the same time paying to make a case go away, we’ve got system that’s tailored for the comfort of the accused. The public interest seems barely an afterthought.
