In case you didn’t know, Cambridge Analytica is the data firm at the center of a scandal involving the misuse of data collected by Facebook on its customers. As a direct result of the scandal, Cambridge Analytica is shutting down its operations and declaring bankruptcy. One can only wonder if Facebook might be right behind them. After all, it is possible for a social media giant to fail. Anyone remember MySpace?
Cambridge Analytica was once a highly recognized pioneer in tech-driven campaign models for politicians to reach voters and swing elections. But despite its reputation, Cambridge Analytica was doomed before the ink was even dry on the story of the Facebook scandal.
According to the Wall Street Journal, which first reported the closure, Cambridge Analytica is facing mounting legal fees and is besieged by negative media coverage that has driven away virtually all of the company’s customers and suppliers. According to Cambridge Analytica: “Over the past several months, Cambridge Analytica has been the subject of numerous unfounded accusations and, despite the Company’s efforts to correct the record, has been vilified for activities that are not only legal, but also widely accepted as a standard component of online advertising in both the political and commercial arenas.”
According to the Wall Street Journal, Cambridge Analytica has come under heavy scrutiny and sparked a global debate about data privacy for how it improperly obtained the personal data from 87 million Facebook users in order to serve targeted ads on behalf of the Trump campaign during the 2016 presidential election. The firm is also under investigation in the U.K. for how it used the Facebook data in the Leave campaign ahead of the Brexit vote in 2016.
The extent of the data collection, which violated Facebook’s own policies at the time, and how it was used for targeted political ads was revealed by whistleblower Christopher Wylie and first reported by The Guardian and The New York Times.
But in reality we are looking at the wrong side of the coin. In short, this is an epic fail of historical proportions by Facebook. Facebook continues to lose face and all credibility as a responsible social media platform. Throw in the Diamond and Silk debacle and Facebook is going down fast.
We are also now getting reports that Facebook was too busy making money off the naiveté and ignorance of its users. How did they manage to do this? They granted users free accounts and had them sign an agreement with terms and conditions that somehow constitutes a voluntary and informed surrender of our basic rights to privacy under the 4th Amendment of the Constitution.
As a refresher, here is the pertinent information as published by Time: “Amendment IV: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”
Now here is the crux. Facebook relies on attracting advertisers in order to monetize their site. But Facebook was only able to do that because of its user base. They grew that user base by assuring users that both the main platform and third-party apps (like games, quizzes, and surveys) would honor all the user’s privacy settings, to protect the user’s profile, everything uploaded or messaged, and the user’s Facebook Friends list.
But that was a lie. Facebook’s deep dark secret was exposed to all when the Cambridge Analytica bombshell went off. It showed that Facebook was negligent—dare we say complicit and uncaring—in the illegal use of users’ data and in direct violation of their users’ right to privacy.
Just how big of a problem is it? Well, as mentioned above, reports as of April 4, 2018 indicate some 87 million people have had their Facebook data “mined” (collected and used for marketing/advertising or other purposes) by Cambridge Analytica alone.
Facebook currently has about 2.2 billion users. So we are probably just looking at the tip of the iceberg.
Then on the back of the Diamond and Silk debacle and the Cambridge Analytica bombshell we learn through an unbelievable article in the Daily Mail that Facebook was colluding with high profile U.S. hospitals in a brazen attempt to obtain protected patient data.
According to the Daily Mail, the enterprise (which is illegal, by the way) is to combine HIPAA-protected hospital patient data about Facebook users’ medical conditions with the users’ socio-economic status, as determined from the information the users post on Facebook.
CNBC indicated that, as recently as last month, Facebook asked several top U.S. hospitals to provide “anonymized” patient data “for a research project.”
Now this is all a farce! Facebook claims that the data would have been anonymized and that the anonymization would protect patients’ identifiable information. But any tech-savvy third party software developer could easily create a software program that can easily match up individual data in both sets of information thereby allowing a positive identification. This technique is called “hashing” or a “hash function” and it isn’t hard to do. In short, Facebook is full of it.
But of course, don’t think for a minute that neither Facebook nor the doctor behind it all, Dr. Abnousi, wouldn’t try to put a spin on it. According to them, they only have the public’s best interest at heart. Seriously? What they are doing is blatantly illegal.
From the Daily Mail article cited above: “If someone is elderly and does not have friends or family living nearby (information that can be obtained from Facebook), doctors could send over a nurse to check on them after serious surgery.”
So we are supposed to believe that Facebook’s motives are purely altruistic? Really? So, Facebook…how much would it cost to send a nurse to check on them? I wonder if you already have a business plan made up to take advantage of this untapped market you just discovered.
Come on Facebook and Dr. Abnousi, you know—or damn well should know—that data mining patient information to target adverting in Facebook is against the law. Yet, you had secret meetings to discuss, conspire and collude to actually implement this disgusting business practice.
Do you see it yet? Do you see the nexus of the problem yet?
Facebook has to mine data and take advantage of its users in order to entice advertisers to spend money on their platform.
Thankfully the Cambridge Analytica scandal and the violations of users’ privacy has stopped Facebook in its tracks as they scramble to cover their proverbial you know what.
This quote published in Newsmax, from a Facebook statement to CNBC, sums up the current company mindset and legal position: “Last month we decided that we should pause these discussions so we can focus on other important work, including doing a better job of protecting people’s data and being clearer with them about how that data is used in our products and services.”
But it may be too little too late. Facebook’s corporate stock continues its bear (loss) run. Last time we checked, their stock was down $40 per share in just under two months. To put that in concrete perspective: That’s equal to about $100 billion in stock value.
In a disturbing NPR interview with Facebook’s Chief Operating Officer Sheryl Sandberg, it becomes clear that the social media giant allowed third-party access to millions of users’ data—and had no oversight over this illegal data mining operation.
Their only defense? “We were way too idealistic. We did not think enough about the abuse cases.” Well, at least to Sandberg anyway. Does anyone believe this? Come on, Facebook…you were purely driven by profits and ideology and you are not fooling anyone. At least not according to your stock price anyway.
It’s simple: Ms. Sandberg and the rest of the Facebook cronies thought they were untouchable and that they could impose their own brand of editorial and moral standards on your end users and those in the advertising community…all while censoring conservative voices and controversial posts that were antithetical to their belief system.
But we are now seeing the cracks in the system mimicking the spindown of MySpace. Maybe, Ms. Sandberg and Mr. Zuckerberg, you should have paid attention.
According to Wikipedia, MySpace is a social networking website offering an interactive, user-submitted network of friends, personal profiles, blogs, groups, photos, music, and videos. MySpace was the largest social networking site in the world, from 2004 to 2010. It is headquartered in Beverly Hills, California.
On April 19, 2008, Facebook overtook MySpace in the Alexa rankings. Since then, MySpace has seen a continuing loss of membership. There are several suggested explanations for its decline.
Marvin L. Gittelman suggested that the $900 million three-year advertisement deal with Google, while being a short-term cash windfall, was a handicap in the long run. That deal required MySpace to place even more ads on its already heavily advertised space, which made the site slow, more difficult to use, and less flexible. MySpace could not experiment with its own site without forfeiting revenue, while rival Facebook was rolling out a new clean site design. MySpace CEO Chris DeWolfe reported that he had to push back against Fox Interactive Media’s sales team who monetized the site without regard to user experience.
And therein lies the problem for Facebook.
They are now a publicly traded company and don’t have the freedom or the flexibility they once had. They now must generate revenue for the shareholders and this places incredible pressure on Zuckerberg and his team.
So, one avenue to monetize and generate revenue was through the mining and selling of their users data. Only they got caught red-handed. It would now appear, if they are smart anyway, that Facebook will need to terminate this revenue stream and or curtail it significantly.
The only other avenue open to them is advertising revenue. And we already know what happens when you advertise too much. We also know what happens when the proverbial cat is let out of the bag.
You see, Facebook might be offering you a “free” service. That is until we all came to realize that all your personal information, including pictures of your kids and your wife—and soon, perhaps, your case of indigestion or erectile dysfunction—has been scooped up for exploitation by a corporate conspiracy.
In short: contemptible advertising. It was the downfall of MySpace and could very well be the dethroning of Facebook.
But if that’s not the end of Facebook, consider this: Over 87 million users suffered at the hands of Facebook’s illegal activity. At $40,000 per violation, Facebook might be looking at almost $3.5 trillion of financial obligations. Need we point out that this enormous sum of money would probably bankrupt the already beleaguered company?
One can only wonder how much longer until Facebook’s funeral.
