On Monday Facebook was hit by one of the biggest privacy crises till date, and by Tuesday, the shareholders in the company had collectively lost over $60 billion in share value. The tumble came after a shocking report that one of the data firms called Cambridge Analytica, working for Donald Trump’s election campaign in 2016, had illegally gained access to over 50 million Facebook user accounts to ensure the future-president’s victory.
Trouble in Paradise
Facebook has messed things up again, and this time, its mistake could bring disastrous consequences to the company’s shareholders, who have already faced a setback of $60 billion in two days since the privacy scandal first hit the news.
According to news sources, a Facebook app created by a university professor in 2014 was aimed at mining data on millions of users through personality quizzes and other apps which asked users’ consent to use their personal information as well as that of their Facebook friends.
One consulting firm named Cambridge Analytica, which was also the biggest founder of the data mining project, used the information on millions of Facebook users in 2016 presidential elections to help Donald Trump win the race against Hillary Clinton. As an existential crisis looms over the horizons for Facebook Inc., spooked investors are already pulling out their shares from the company. Many believe that the damage to the social media giant’s reputation and the users’ trust could take a long time to fix.
Facebook has been Selling User Data For Years
The news has only highlighted an issue that is at the core of the company’s business model: using data exploitation to make money. Sure, there are other ways that Mark Zuckerberg makes his million-dollar paycheck, but one of the biggest source of earnings for Facebook is data mining and selling users’ information to advertisers and apps for targeted marketing.
But even though Facebook regularly monitors who it sells the data to, it can’t really prevent its buyers from passing down the sensitive information to malicious third parties who tend to use it to fulfill their own ulterior motives.
The most shocking aspect of the latest data scandal was that Cambridge Analytica’s actions were completely in line of the social media giant’s policy and wasn’t exactly a data ‘breach’. The Cambridge professor in question, Aleksandr Kogan, who was responsible for harvesting data from 50 million Facebook users, did it simply by creating online surveys which were filled out by hundreds of thousands of people. His actions were completely acceptable as per Facebook’s policy
Data Breech Inevitable, Facebook Says
According to Facebook, the company can’t force its buyer to comply with its data policy which is exactly why it is facing a huge existential crisis today.
In a pubic statement, even Facebook admitted that it could not find a reason to accuse Kogan of data breach since he gained access of millions through a completely legitimate way. However, the only violation made by the Cambridge professor was his passing the data to third parties without the company’s consent.
One of the parties which benefited from Kogan’s data bank was Cambridge Analytica, a political analytics firm which was created by Steve Bannon who served as an important aide to Donald Trump during his election campaign in 2016.
In an interview with CNN sources from Facebook admitted that it is impossible for the social media company to monitor the data once it is sold to advertising companies and apps. Once the information is in an outsider’s hands, they can do anything they want with it.
Facebook’s Murky Future
In 2017, the total number of Facebook users declined by 2.8 million and the trend is expected to continue this year as well, according to eMarketer’s predictions
Despite Facebook’s constant rhetoric about protecting users’ information, people are now finding it increasingly difficult to believe anything the social media giant says – especially when its main business is selling users’ information to other parties who don’t always have the best intentions at heart.
The new scandal comes at a difficult time for Facebook, which is already in the midst of making serious changes to the platform and is losing millions of active users every year. The Cambridge Analytica scandal will only accelerate the downward trend which is slowly killing Facebook’s popularity.
