Facebook Cambridge Analytica Scandal Is a Crisis For All Online Companies

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There is a crisis at Facebook because of the constant negative media coverage of the Cambridge Analytica scandal causing users to question staying on the product and that has caused Facebook stock drop a truly staggering $70B in value in 11 days.  It’s founder, Mark Zuckerberg, owns 28.2% of the company so he has lost $20B personally.facebook-scandal-stock-price-drop-70b-zukerberg$20b-11-days

There is a also crisis being experienced by some Facebook users that have finally realized Facebook and nearly all other ‘free’ online services are harvesting personal data to allow others to micro-target advertising at them.  WHO DIDN’T KNOW THIS ALREADY?  Apparently millions of people thought Facebook was some benevolent do-gooder, that provided a complex service for free because they were nice people.

The saying in the industry holds as true today as it did in the 1999 when it was coined: “You are not the customer; you are the product“.

The only ethically questionable behavior by Facebook in this current crisis, was corrected way back in the spring of 2015.  That issue was the ability of users to share not only their own information, but that of their friends (if those friends had not changed default privacy settings).

Facebook made USD$40B in 2017 and that was another record amount for them.  They did this by monitoring you, figuring out what you might be interested in and then allowing advertisers to target you personally, just like they said they would.

The along came Cambridge Analytica who used a large set of Facebook user data and figured out patterns they could use to apply to other Facebook users.  Cambridge Analytica organized the social media efforts for the Donald Trump Presidential campaign and now it is a political crisis too.

It is important to note that:

  1. Cambridge Analytica did NOT steal the data or breach Facebook’s security in any way.  They were simply given the data by a University Psychology professor that had ASKED Facebook users to fill out a questionnaire
  2. Cambridge Analytica did NOT use Facebook data in question to sell advertisements to those 50 million Facebook users; they used that data as a sample to develop their algorithms on so they could much more accurately target ads to other Facebook users.
  3. The only legal problem with what has occurred so far is that Facebook’s terms of use do not allow data collected in Facebook to be transferred to others.  This is a technical breach of contract only.  If Cambridge Analytica had done the survey themselves, there would not have been any legal issue.
  4. The 50 million user number thrown around is semi-accurate.  The survey had about 270,000 responses but in 2015, it was possible for those that answered the survey to also provide limited information on their Facebook friends, if those friends allow it.
  5. Facebook ended the ability for users to contribute their ‘friends’ data in the spring of 2015.

See our timeline of the Facebook Cambridge Analytica scandal HERE.

Now law makers, regulatory bodies and (shocker) even Facebook users have figured out that Facebook, Kijiji and thousands of other sites are doing what they always said they were doing; collecting information on users so they can better target advertisements to those users.

There is definitely a discussion worth having, over how user data is stored, searched, sold, and protected.  We can ask questions, that should have been asked many years ago like:

  1. Who owns user data?
  2. Should users have a right to have their data deleted?
  3. Should companies like Facebook be required to clearly notify users when data is sold or accessed by third parties?
  4. Is it appropriate for companies like Facebook to combine user data from many other sources to create a very complete profile of their users?
  5. and on, and on and on.

The Facebook Cambridge Analytica scandal has caused a crisis the online advertising model that nearly all companies with large web presence use.  Think about the seemingly endless amounts of personal data that Google, Apple, MySpace, Twitter, Snapchat, eBay, Alibaba, Reddit, LinkedIn, Tumblr, Pintrest, Baidu, Amazon, Netflix, Microsoft, Groupon, TripAdvisor, Expedia, Spotify, Samsung, AirBnB, WorkDay, Uber, and on and on, have on you.

Burying answers to privacy rights questions in a 10,000 word, completely inflexible, one sided, End User License Agreement (EULA) is clearly no longer sufficient.  Governments and lawmakers around the globe are clearly going to enact some legislation to empower users and curb online companies abilities to make profits from your data.

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