The Price of Data

“We have a responsibility to protect your information. If we can’t, we don’t deserve it.”

This is the beginning of a letter written by Mark Zuckerberg, featured in full-page ads in the Washington Post, the New York Times, the Wall Street Journal, and a handful of U.K. papers on Sunday morning, March 25, 2018. His public apology on behalf of Facebook comes at the height of a fast-moving scandal involving the social media giant and Cambridge Analytica.

The political data analytics firm used personal information—gathered via a Facebook quiz developed by a Cambridge University researcher, Dr. Aleksandr Kogan — from 50 million users without their permission. The firm is accused of using this data to target voters with personalized political ads, ultimately influencing the outcome of both the U.S. presidential election and the U.K. Brexit vote.

Not exactly a data breach, but…

In a recent statement on their website, Facebook argues that this was not a data breach since users chose to sign up for the app and knowingly provided their information. While third-party apps collect personal information about Facebook users every day, this was different—the 270,000 users who willingly took the quiz did not agree to that information being shared with Cambridge Analytica, or the firm gaining access to tens of millions of those users' friends' data. Concerns over privacy and data are not new, but these incidents have triggered a global uproar over the use and misuse of data.

American and British lawmakers are demanding an explanation from Facebook about how the data was obtained. The U.S. Federal Trade Commission launched an investigation into Facebook’s data privacy practices, which could result in trillions of dollars in fines. And the attorneys general for almost 40 U.S. states and territories are seeking details on how Facebook monitored the collection of data from app developers.

A breach of privacy, and trust

Facebook is already paying the price for losing users’ and investors’ trust. Since news of the scandal broke, the company’s value had dropped by $100 billion in a week. A series of class action lawsuits against Facebook and Cambridge Analytica have been filed by users and shareholders alike. And due to their role in shaping the outcome of Brexit, we may see class action suits filed in the U.K. as well.

As new revelations come to light, the value—and power—of data remains at the center of it all. The events that transpired between Facebook and Cambridge Analytica were detrimental to democracy at a global scale—shaping the course of two historic elections, without the consent of millions of people affected. This scandal exposes just how much we don’t know about the ways in which companies access, use, and even steal our personal information.

Tech business models at stake

While it’s too soon to tell what this means for Facebook’s future, this breach in trust could dramatically shift users’ online behavior and the bottom lines of many social media platforms. Much of today’s technology advances are premised on the notion that consumers are willing to trade their personal information for either free services or improved online experiences—a trade-off that is now coming into question and potentially casting doubt on the business models of some of the world’s largest companies.

Filed under: data privacy, data security

By continuing to browse and accepting this banner, you consent to the storing of first and third-party cookies on your device to enhance site navigation, analyze site usage, and assist in Epiq’s marketing efforts. Read more on our cookie notice.