What’s next for Facebook, Post Cambridge Analytica?

By - CTL
April 9, 2018
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By Dorothy Thompson

It seems that a day doesn’t pass where Facebook isn’t apologising for some further breach of trust. Talk about an accident looking for a venue – Zuckerberg lurches from crises to crises.

Cheating as a subject seems to occupy the minds of the entire Australian media at this moment. Yet far greater problems face our community than three silly young cricketers. Corporate malfeasance appears not only endemic but also systemic. What with the explosive, on-going revelations during the banking Royal Commissions, tax evasion and avoidance by major corporations, Union bribery corruption, why should we be surprised to learn that Facebook is up to its arm pits in fraud, misrepresentation, and deceit?

As a general rule of thumb, business using “Cambridge” or “Oxford” in their name exponentially expands the risk of dodginess correspondingly. Particularly if the company is not based in either of those seats of learning.

This brings us to Cambridge Analytica, a company with a London Docklands address that has embroiled Facebook in yet another global scandal. The case underlines the usefulness of private company disclosure. Cambridge Analytica obtained data from now possibly 83,000,000 (million) Facebook users most of whom were United States of America voters. These revelations have deepened suspicions that the social licence of the social network and that of other big tech groups must be put under review.

Who would have thought back when 12-year-old Mark Zuckerberg​ was developing Zucknet​ that online social media would emerge as a threat to democracy Worldwide?

Facebook, the company the dentist’s son from White Plains, New York, went on to launch eight years later, is now under fire worldwide following concerns users’ personal data has been hijacked by political partisans.

The abuse of information has been cited as a factor in the outcomes of both the 2016 Brexit poll and the American presidential election.

The data was originally collected by a University of Cambridge psychology professor, Dr. Aleksandr Kogan, ostensibly for the purposes of legitimate research.

Kogan created a Facebook app called “thisisyourdigitallife” and paid 27,000 people to take a personality quiz and download it.

The app then harvested their personal data and that of their friends, their friends friends, friends of friends of friends and so on. Most of the people caught up in the data mining exercise never consented to it or even had any idea it was going on.

Kogan passed the information on to Eunoia Technologies, the company that went on to form Cambridge Analytica. Cambridge Analytica, which was funded by wealthy US Republican donor, Robert Mercer, and headed by Stephen Bannon, has been under scrutiny for at least a year over its use of “hypertargeting” voters as part of Donald Trump’s campaign.

Although Facebook was made aware of the breaches in 2015, directing CA to delete the information, it chose not to make the data leak public.

While, at first glance, CA appears to be the bad guy in this story the fact is Facebook facilitated an enormous breach of trust.

None of the estimated 2.2 billion users was ever told the odds were their private information would be handed over to political mercenaries and sold off to the highest bidder. If it was, it was well buried in fine print.

As a $US500 billion plus company, Facebook has more resources to protect its clients than most organisations. Its failure suggests a high degree of naivety on the one hand and potentially indifference on the other.

It has paid dearly with the share price plummeting by more than five per cent in recent days. This has wiped more than $US60 billion off the value of the company.

It also faces the prospect of class actions, breach of privacy investigations – including at least one to be spearheaded by Australian Information Commissioner, Timothy Pilgrim, and the possibility of heavy fines.

Mr Zuckerberg is learning the hard way that when billions of people put their trust in you there will be heavy consequences if you let them down.

He would be keenly aware that just as Facebook wiped the floor with networks such as Sixdegrees and Livejournal back in the day, it is equally vulnerable to a loss of public confidence and support.

While the Cambridge Analytica scandal is not necessarily an existential crisis for Facebook it should serve as a wake up call on the importance of maintaining trust.

Social networks need their members more than their members need social networks. They can’t exist without them.

Privacy advocates are calling on all social media platforms to more responsibly handle and restrict improper access to data in the wake of Facebook’s latest controversy where it acknowledged users’ personal information had leaked through a third-party app.

“People are shocked this happened, but I’m shocked it didn’t happen sooner… it’s so easy to penetrate this kind of thing with social media providers,” said Joseph Steinberg, founder of social media security company “SecureMySocial”, in a recent interview.

“The real issue here is Facebook… not the people who collected the data or those who used it. Facebook knew it happened and didn’t say anything to the public.”

We too have highlighted on many occasions in CTL that Facebook is out of control. Back in April 2017 in out story “The Tangled Web What Lies Beneath”. In it we noted:

Andrew Scipione, NSW’s top police officer in the week that he retired told an inquiry into human trafficking by the NSW Parliament Chairman Paul Green, that Facebook was a harbor for criminals, including drug gangs and paedophile rings to evade detection.

Likening it to a lawless superpower (Facebook) that has more people than any country on earth without proper policing. In further testimony before the inquiry Mr. Scipione’s said Facebook has 1.86 billion active users — more than the population of China, the world’s most populous country with 1.37 billion people.

“Any nation has boundaries, it has highways, there are police that patrol highways, there are police that patrol precincts — they keep people safe,” he said. “(Facebook) doesn’t have any police force.”

In the wake of this scandal, Facebook CEO Mark Zuckerberg has finally broken his silence over the Cambridge Analytica scandal, admitting his company “made mistakes.”

Mr Zuckerberg had not been seen for many days of silence, even as a firestorm of criticism from politicians, regulators and others engulfed the company he co-founded.

But Mr Zuckerberg emerged to outline steps to protect user data in the future. Mr Zuckerberg posted that his company has a “responsibility” to protect its users’ data, and “if we can’t then we don’t deserve to serve you.”

He admitted: “We made mistakes and need to step up.”

Outlining the steps Facebook will take to ensure members’ privacy, Mr Zuckerberg said the firm would investigate all apps that had access to large amounts of information before Facebook tightened up its platform to reduce data access in 2014, and would conduct an audit of any app with suspicious activity.

“And if we find developers that misused personally identifiable information, we will ban them and tell everyone affected by those apps,” he wrote.

The company would also increase restrictions on developers’ data and require developers to sign a contract in order to ask members for access to their posts or other private data.

Developers’ access to data would be removed if a member hadn’t used the app in three months.

Mr Zuckerberg added that a tool to deny apps’ permissions to data, which already exists, would be added to the News Feed for greater visibility.

The comments come after significant damage has already been done in a crisis that has prompted calls for him to testify before legislators in the US and Europe, carved tens of billions of dollars off Facebook’s value, and raised new questions about the leadership of one of the world’s most powerful technology companies.

“Facebook is exhibiting signs of systemic mismanagement, which is a new concern we had not contemplated until recently,” Pivotal Research analyst Brian Wieser said in a note Wednesday morning. Mr. Wieser has a “sell” rating on the stock.

Facebook says Mr. Zuckerberg and Chief Operating Officer Sheryl Sandberg have focused on addressing the concerns behind the scenes. “Mark, Sheryl and their teams are working around the clock to get all the facts and take the appropriate action moving forward, because they understand the seriousness of this issue,” a Facebook spokesman said.

The US Federal Trade Commission is now investigating whether Facebook’s user-data practices violated terms of a 2011 settlement. Users have aired their anger over social media, using the hashtag #deletefacebook. Late Tuesday, Brian Acton, co-founder of WhatsApp, a messaging app that Facebook bought for $22 billion in 2014, appeared to join them, with a message on his Twitter account saying “It is time. #deletefacebook.”

“The entire company is outraged we were deceived,” the Facebook spokesman said, saying the company would do “whatever steps are required” to protect user information.

The scrutiny has weighed on Facebook staff, with many questioning why Mr Zuckerberg hasn’t been publicly discussing the company’s role, according to current and former employees. At a question-and-answer session for employees Tuesday about the episode, Facebook lawyer Paul Grewal presided. Mr Zuckerberg and Ms Sandberg weren’t in the room.

Over the weekend and early this week, senior Facebook officials spent much of the time trying to nail down the facts of what happened with Cambridge Analytica, and contemplating whether and how Mr Zuckerberg should respond, a person familiar with the matter said.

Facebook has been under fire for more than a year on a range of issues, but criticism intensified last month when special counsel Robert Mueller secured indictments against a group of Russians for manipulating Facebook and other social platforms to sow discord.

In the month since, Mr. Zuckerberg posted publicly on his Facebook page typically his main venue for disseminating his views only twice: once with photos of his family celebrating Chinese New Year, the other of them celebrating the Jewish holiday of Purim.

Publicly, Facebook has left it to other senior executives to make its case, often using posts on rival Twitter Inc. — a strategy that has sometimes backfired.

Executives responded to the current uproar over the weekend by arguing that what happened didn’t constitute a data breach prompting users, privacy advocates and others to say it was missing the point.

Last month, Facebook’s head of advertising, Rob Goldman, drew fire when he defended Facebook’s handling of the Russia crisis and argued the Russians bought ads to exploit social divisions, not primarily to sway the 2016 U.S. presidential election a point that some in Washington interpreted as contradicting the indictment.

Internally, Mr Zuckerberg has appeared to take the criticism in stride. During an employee question-and-answer session last month, Mr Zuckerberg said Mr Goldman’s comments didn’t reflect the company’s thinking, people familiar with his comments said, but he still backed Facebook’s strategy of having a select group of senior executives engage directly with critics, academics and journalists on Twitter and be more transparent about the company’s process and thinking.

Whilst there is no doubt that Mr Zuckerberg’s concept for Facebook was brilliant. However, one has to wonder just how competent or qualified he is to run a business of the size Facebook has grown into.

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