Facebook has had plenty of privacy scandals before. In 2007, Mark Zuckerberg apologized for the Beacon ad program—which tracked purchases on outside sites and posted that information on to a user’s news feed. Privacy issues are nothing new for a company specifically designed to harvest your humanity, but this Cambridge Analytica investigation has shifted the ground under Facebook’s feet. No longer are they the plucky underdogs here to help connect you with your friends. Instead, they are a titanic object of scorn and derision, as the new intro for HBO’s Silicon Valley demonstrates.
That said, a TV show designed to satire Silicon Valley is the least of Facebook's problems. Here are five gigantic issues that Facebook is dealing with right now.
This is an under-the-radar scandal that definitely should not be one. Multiple Android users pulled all the data Facebook has on them, and their call history was contained within Facebook's treasure trove. Here's the gist of what people are discovering.
The various reports from Android users—including Ars Technica’s IT and National Security Editor (a former Navy officer)—and Facebook’s denial cannot both be true, so which one do you trust? (Pretty sure that Facebook doesn’t want you to answer to that question)
Legislatures in the United States and United Kingdom have already called on Mark Zuckerberg to testify, and he has declined an invitation across the pond. However, on this side of the Atlantic, it’s a different story. CNN is reporting that Zuck will indeed speak to Congress. Dianne Feinstein called the latest Facebook privacy scandal a “danger signal,” and according to the AP, “She wants Zuckerberg’s assurances that Facebook is prepared to take the lead on security measures that protect people’s privacy — or Congress may step in.”
In 2011, Facebook settled a case with the FTC over allegedly deceiving their customers. In light of the 50 million (at least) Facebook profiles scraped by Cambridge Analytica, the FTC announced yesterday they are investigating these practices yet again. Per the FTC:
“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers. Foremost among these tools is enforcement action against companies that fail to honor their privacy promises, including to comply with Privacy Shield, or that engage in unfair acts that cause substantial injury to consumers in violation of the FTC Act. Companies who have settled previous FTC actions must also comply with FTC order provisions imposing privacy and data security requirements. Accordingly, the FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook. Today, the FTC is confirming that it has an open non-public investigation into these practices.”
The FEC is fundamentally changing Facebook’s business model in the interest of protecting the public from nefarious actors like Cambridge Analytica. Per Bloomberg from a report last November:
Facebook Inc. says it supports policy measures that promote transparency in online campaign advertising, according to a comment filed with the Federal Election Commission.
The company fought for years for blanket exemptions from the FEC from the political advertising disclosure rule — a move that has come under fire since it was revealed that Russia bought ads on the social network’s platform in an attempt to sway the 2016 U.S. presidential election.
What the FEC wants to do is take the same rules which apply to paid advertisements on TV and newspapers, and impose it across the web too—and they just introduced a draft proposal of this change last week. Facebook fought tooth and nail against this for years, and reversing course and supporting it—but asking that “digital companies be permitted to be creative and flexible”—is proof that Facebook has accepted the direction the winds are blowing, and it is trying to get ahead of serious regulation. Facebook has similar spying capabilities to the NSA, it’s time they started being regulated in a manner commensurate with the power they wield.
In 2017, 98% of Facebook’s revenue came from advertising. It’s not hyperbole to say that Facebook’s entire reason for existence is to shove ads in your face. Your friends are just accessories to the larger goal. If there is no advertising on Facebook, there is no Facebook, which is why this development may be the most concerning of all for Mark Zuckerberg. Elon Musk followed the founder of WhatsApp (who made a fortune off Facebook) and actually deleted Tesla and SpaceX’s Facebook pages. In the wake of the Cambridge Analytica investigation, advertisers are demanding far more concessions from our tech giants. Per The Wall Street Journal:
Madison Avenue’s increasing uneasiness with the platforms and its moves to push back aggressively are fundamentally reshaping the relationship. Advertisers’ broad push for changes has played out in behind-the-scenes dust-ups, veiled and overt threats and advertising boycotts, and has extracted some concessions from the tech giants. Among the leaders is P&G, the world’s largest advertiser.
Many companies are actively policing their ad purchases to ensure they avoid objectionable or irrelevant content. Some are cutting budgets. And they are demanding far more transparency from Google and Facebook about the performance of their ad campaigns to make sure they aren’t wasting money.
Mozilla Corp, Company Action Date Pep Boys, and Commerzbank (Germany’s 2nd largest bank) have all completely pulled their ads off Facebook, and more seem primed to follow. The ultimate irony here is that Madison Avenue is just responding to the backlash. Their righteous outrage over these de facto data breaches rings hollow given that these ad agencies are explicitly paying Facebook for that data. The companies they represent are just reacting to the changing of the market, especially now that Cambridge Analytica has provided a massive shining beacon demonstrating how the internet really works. There’s a reason it’s free; we’re worth more to the Facebook’s of the world than they are to us. The billion-dollar question being pondered in boardrooms across Silicon Valley is: once we realize our power in that value proposition—which we all may be doing right now—will that change our behavior online?
Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.