5 things you need to know about the Facebook data scandal
Facebook are having a mare.
The social giant has come under a lot of scrutiny recently due to concerns that it was used by Russian advertisers to influence the 2016 US election. And evidence came to light in March that up to 87 million people’s data were improperly shared with the political consultancy Cambridge Analytica.
The fallout from those revelations is still continuing, with the company announcing several changes to how its advertising platform works. CEO Mark Zuckerberg is also testifying before US Congress twice this week.
It’s been an extremely fast-moving story, with new developments every day. So, we’ve highlighted the top five things you need to know below.
1. What actually happened
On 17 March, details about unethical use of Facebook user data by the political consulting firm Cambridge Analytica came to light. The data was used to build voter profiles for political targeting in order to influence the US election and the UK’s vote on leaving the EU.
The story was a scoop by the New York Times and The Guardian/Observer newspapers, based on information from whistleblower Christopher Wylie.
In Zuckerberg’s testimony to Congress on the 9th of April, he explained that the user data was acquired in 2014 via a ‘personality test’ app which was able to access detailed information on the friends of those who used it. This happened shortly before Facebook changed the rules about data sharing by third party apps.
Zuckerberg’s testimony also states that Cambridge Analytica falsely certified to Facebook that the data was deleted. But Facebook made no efforts to verify this.
2. Facebook has admitted it was at fault
Mark Zuckerberg has admitted that the Cambridge Analytica incident was “a major breach of trust” and that Facebook has not done enough to safeguard user’s personal information, or mitigate the possibility of the platform being used for nefarious purposes.
The company published full page apology ads in response to the Cambridge Analytica revelations in a number of national newspapers, and is now notifying users whose data was misused by the firm when they log on to the Facebook app or website. Zuckerberg’s testimony to congress also includes a personal apology:
“... It's clear now that we didn't do enough to prevent these tools from being used for harm as well. That goes for fake news, foreign interference in elections, and hate speech, as well as developers and data privacy. WE didn't take a broad enough view of our responsibility, and that was a big mistake. It was my mistake, and I'm sorry. I started Facebook, I run it, and I'm responsible for what happens here."Mark Zuckerberg, Facebook CEO
3. A public backlash is in full swing
As well as official demands that Facebook be held to account, negative sentiment about Facebook has increased, with the hashtag #DeleteFacebook soon trending on Twitter, as well as #WheresZuck (when the CEO failed to publicly acknowledge the scandal for several days).
Elon Musk, Cher and a number of other big names announced they were leaving the platform, and even advertisers began getting cold feet, with Mozilla Corp. and US auto parts retailers Pep Boys suspending their ads.
Polls also indicate that public trust in Facebook has plummeted. According to Reuters/Ipsos, less than half of Americans (41%) trust Facebook to obey U.S. privacy laws following the scandal, compared to 66% for Amazon, 62% for Google and 60% for Microsoft.
4. Facebook has already responded by removing third party data aggregators
Facebook is cutting off third party data aggregators like Axicom and Datalogix, which are all the clever (but frowned upon) and highly specific targeting options.
It's a big step backwards in terms of the options available to marketers, and according to TechCrunch, marketers will have to certify that they have permission for any outside data they use to target ads on Facebook using the Custom Audiences tool. It’s still not clear how Facebook will verify this however.
“Facebook will ask advertisers to certify they have permission for whatever outside data they use to target ads on Facebook. But Facebook may not be able to verify that claim, in the same way it did not verify Cambridge Analytica's certification that it had deleted the data it improperly obtained on millions of Facebook users."Tim Peterson, DigiDay UK
The company also introduced improved privacy tools for users, but these would most likely have to be introduced anyway, at least in Europe, due to GDPR.
5. The backlash may start to affect other tech companies
Social spending by advertisers is forecast to increase despite concerns over data misuse. It’s possible that Facebook’s competitors, particularly Google and Twitter, will benefit if they continue to provide more attractive options to advertisers. But in the long-term, it could herald the end of self-regulation for tech companies.
Apple CEO Tim Cook is among those calling for tighter regulation of tech companies, but then unlike its competitors such as Facebook and Google, Apple doesn’t rely on monetisation of personal data as its income comes from hardware and paid services.
Perhaps more surprisingly, Zuckerberg told CNN he is open to Facebook being regulated.
“I actually am not sure we shouldn't be regulated. I think in general technology is an increasingly important trend in the world and I actually think the question is more, what is the right regulation rather than "yes or no, should it be regulated?""Mark Zuckerberg, Facebook CEO
Zuckerberg's below response suggests he doesn't seem to have a full grasp on the impact of the new GDPR regulations however.
As Facebook continues to change the rules, marketers will need to adapt to the new conditions.
Despite the volume of issues already raised, the fallout from the Cambridge Analytica scandal still feels like the tip of the iceberg.
Facebook’s process of weeding out everything wrong with their data and privacy processes is very much ongoing.
And while this is all happening in Facebook’s garden right now, it would be surprising if this didn’t start to drift into other social channels like Instagram (who are owned by Facebook and have the same ad engine) and Twitter (who have the same 3rd party data aggregators).
Google is also unlikely to be immune. Only this week it has emerged that YouTube has been accused of illegally gathering data on children.
With plenty of activity around this issue still to come in the next few weeks, one thing is for sure; marketers will need to be fully aware of the changes as they happen, and adapt accordingly.
"How marketers respond to all of this is, quite literally, the biggest question our discipline has faced in decades."Mark Riston, Marketing Week
- For the full story: a timeline of how the scandal unfolded in the New York Times.
- Read Mark Ritson's excellent analysis of the implications for marketers at Marketing Week.
- For Facebook’s version of events, read Mark Zuckerberg’s pre-prepared testimony to Congress.
- The Drum has summarised the key takeaways for media professionals from Zuckerberg's 9th April Congress hearing.
- And HubSpot have published an excellent summary of the House Energy and Commerce Hearing on 10th April.