The world of social media and democratic politics was rocked on March 17, 2018, when THE NEW YORK TIMES reported the Cambridge Analytica, a data analytics consulting firm misused the personal information of over 50 million Facebook user to influence the results of US presidential election and the Brexit referendum in the UK. The source for the story of our decade was a whistleblower named Christopher Wylie, an ex-Cambridge Analytica employee.
The first indication of the misuse of personal information by Cambridge Analytica and Facebook was first reported by the Harry Davies, a reporter at The Guardian in 2015, concerning the election campaign by US Senator Ted Cruz for his bid for the president of United States. Facebook initially refused to comment on the story in the follow-up of the story by the various News Organizations.
The theft started innocuously with a data scientist at Cambridge University, developing a Personality Quiz mobile app, "thisisyourdigitallife", which was later sold to Cambridge Analytica. Cambridge Analytica used the app as a marketing research tool initially for surveying with the informed consent of the users for academic purposes. However, the design of Facebook, when used in conjunction with the app, allowed the app to not only to collect the personal information of the people who had consented and were taking the survey but also of those users who were on these people’s network. This allowed Cambridge Analytica access to personal data of millions of Facebook users.
The data allowed Cambridge Analytica to build a powerful software program to predict and influence the choices of the electorate during the elections. The software allowed the company to construct individual profiles of the users and influence their decisions through personalized advertisements based on this profile.
The breach has reportedly resulted in Donald Trump winning the election and UK opting for leaving the EU. It may be noted that Steve Bannon, the principal advisor of the Trump Election Campaign, was heading Cambridge Analytica in 2014.
Further, it has been reported that Facebook had uncovered the theft of personal data in 2015 but however did little to cover the breach to data and failed to inform the affected user of the breach in data. Facebook’s value dropped nearly 50 billion dollars after the misuse came to light. Mark Zuckerberg was subpoenaed in the US Senate hearing into possible theft of the US election and was asked to testify the role of Facebook in influencing the US elections. Facebook has been fined around $5 billion to settle the investigation finally.
Cambridge Analytica, on the other hand, filed for insolvency on May 01, 2018, and has closed its operations. However, it may be noted that Data propria, a consulting firm run by former employees of Cambridge Analytica, has been involved in the Trump’s 2020 re-election campaign. Living in an information age, our generation has to contend with a new dimension to the challenges it brings with it. The information has become a critical resource in our daily lives and businesses. Information, coupled with an active mode of communication, can change the world. Social Media has become that tool of communication were the information can be automatically tailored according to the users' tastes, needs, and personality and thus has critical power to influence our choices. As right now we can only just imagine the effects and implication such targeted dissemination of information, true or false, can fraught on the masses and with the data privacy laws still in its infancy the penalty of such breach of trust as in case of Cambridge Analytica and Facebook is not ascertainable. Further, the rate of change in technology and evolving algorithms has outpaced the development of the legalities involved. As in the case of Facebook and CA, these technologies can potentially be used to undermine the development of these laws by hindering the democratic process. Thus, it begs an important question where even the last bastion of order in society, i.e., the law is susceptible to the malintent of business, where can we look for assurance of protection against such breaches.
It may be noted that this scandal was preceded by the Edward Snowden incident with exposed the illegal collection of personal data by the US government of its citizens. The same was justified based on its use for safeguarding national security. The various legal battles which resulted in some wins for the abolition of the mass surveillance program and some wins in for mass surveillance program, which further culminated in renewing the tenets of the Patriot Act under US freedom Act with some provision on regulating the mass surveillance.
However, the case in the context of the Facebook-CA scandal raises an important point. Deontology says stealing is wrong/evil under any circumstances. Thus, the theft of personal data, even with the sanction of the government, should be wrong. But the same was and is being justified as a right by the law and the government democratically elected by the people as it serves a utilitarian good of national security. On the other hand, CA used the illegally obtained data of Facebook users and used that data to influence the voter choices by exposing them through strategically placed information and promotions.
It may also be noted that the data from Facebook is used by various companies for targeted advertising to improve their topline and bottom-line. Though Facebook’s Term & Conditions states the company doesn’t share the specific details of the individuals, our opinions, beliefs, likes, and dislikes are shared. This is the current business model of almost all internet companies relying on advertising revenue. There is no utilitarian good in this sharing of data. It just helps companies sell their products better, and we don’t mind neither are we outraged as this is portrayed as a cost of connecting with people in cyber-space. However, the potential of misuse of this data, which has now been aggregated for over a decade, is enormous as underlined by the CA scandal. Thus, there is an urgent need for ethical leadership in this domain as laws are lagging the rapidly changing landscape.
Accordingly, we will be examining this case from the perspective of various ethical theories in the following sections.
Rise of Facebook
Facebook was started in 2004 by Mark Zuckerberg, Eduardo Saverin, Dustin Moskovitz, and Chris Hughes, all of whom were Harvard graduates. It started its operation in Harvard University in Feb 2004. Soon students from other schools as Yale and Stanford universities could join. By June 2004, the number of users increased to 2.5 lakhs from 34 schools. At the same time, major corporations like Mastercard company started paying for its exposure on site. By the end of 2014, the number of users reached one million, which was giving direct competition to Myspace which had five million users at that time.
Till 2004, only college students could join Facebook. In 2015, high school students in the US and other students in universities outside the US too could join. By 2005 end, it had 6 million active users, with a growth rate of 500%.
In 2006, it opened its membership beyond students to anyone above the age of 13 years. With this, they started the new era of direct customer engagement. PnG and other marketing companies started participating in such promotions. This was the first time when privacy about customer data came into the picture.
In 2008, Facebook surpassed Myspace as the most visited social website. In 2008, it too started becoming an important platform for political campaigns. In the 2008 US Presidential election, about 1000 Facebook groups were made which were campaigning either for Barack Obama or John McCain. In Colombia and Egypt as well, similar campaigns were launched.
Facebook introduced one new source of revenue. It launched its API, with which programmer could write software and Facebook users could directly avail those through its page. By 2009, developers generating about $500 million in revenue for themselves through Facebook. By 2011, Facebook revenue from one such gaming company, Zynga accounted for 12% of the company’s revenues.
In 2012, Facebook went for IPO and raised $16 billion, with a valuation of $102.4 billion.
Looking at the growth trend of the number of users and revenue over years, it may be noted that the company’s number of users is growing continuously, however, the rate of increase of consumers/users is declining over years. In 2018, it was 8% and it is about 5% in 2019. In contrast, the company’s revenue is growing at a much faster pace. It was about 47% in 2017 and 37% in 2019. Further, it was expected that Facebook revenue would be proportional to a number of users, i.e. it would increase at the same pace as the number of users. But to our surprise, it is increasing at a much faster pace. Revenue/user figure was near $2-3 in earlier years of operation i.e. in 2004-08 and $19 in 2017 and $24 in 2018.
This increase may be somewhat attributed to the network effect of internet-based companies and economies of scales from the increase in operation levels but not completely. Further, the above data points show the volume of research the company is doing on its user’s data and how much value it is being sold for.
Further, the company is looking to monopolize the business relating to online social media which is evidenced by the hefty price paid by Facebook in acquiring WhatsApp in February 2014 and for USD 16 Billion and Instagram in April 2012 for USD 1 Billion. This tactic of monopolizing the market has allowed the company to partially weather the storm that was initiated by the Cambridge Analytica scandal.
History is riddled with examples of companies virtually monopolizing its market of operation and getting away with morally questionable business practices and negligent and malicious behavior by paying a negligible amount of penalty in contrast to the damage inflicted. Therefore, it is imperative for us to be cautious and vigilant to prevent further instances of misuse.
Cambridge Analytica Scandal
We’re only human, and we go through great lengths to get even really cheap things for free. When an opportunity to earn $1-2 showed itself to the American people in the form of ‘itsmydigitallife’ app, they queued up to take a personality quiz developed by a Cambridge University researcher Alexandr Kogan. What they gave in the form of consent while using the app and its quiz was also access to their Facebook profiles and those of their friends. While only 270,000 people took the quiz administered by the app, over 50 million people’s profiles were accessed by the app and permission was obtained from Facebook to use any data collected from the app and Facebook therein would be used ‘for research purposes only.'
What first seemed like an innocuous exercise turned out to be a sneaky exercise to construct voter profiles. All this data collected by itsmydigitallife was handed over to Cambridge Analytica, a British political consulting firm. This violated the agreement under which itsmydigitallife was allowed to use the data in the first place. The dark side to this transfer lies in the fact that the firm was co-founded by a Republican donor, Robert Mercer, who reportedly pumped $7 million into this exercise. Cambridge Analytica gleaned this data to build profiles around the OCEAN framework- Openness, Conscientiousness, Agreeability, Extraversion, and Neuroticism. One thing that this data could do was provide the American politicians with knowledge of which persons could vote whom into power. Another, more obtrusive and deceptive thing that the data was capable of, was providing the politicos with insights on particular psychological games that could sway voters to bring someone into power.
Of course, in 2015, it was revealed that this data was used for Ted Cruz’s presidential campaign. Facebook testified that it removed all data collated for this purpose as their contract was violated, and even banned the use of this data by the app or any related information. This was also verified by Christopher Wylie and Alexandr Kogan, but things spiraled downwards when it came out that Cambridge Analytica made contact with and was engaged by the presidential campaign of Donald Trump. Facebook cried out that it felt outraged and deceived at this gross violation of contracts, but it was too late. There was a great uproar over the callousness with which user data, a veritable goldmine was being used, without user knowledge, and how this very data could be used to manipulate user choices without their knowledge.
It’s all conjecture as the full extent to which user data could have been used in a mala fide way by politicos to have their way with the masses is yet to be ascertained. However, what is certain is that people were paid a pittance as they were made a part of a massive psychological exercise that they didn’t explicitly consent to. It’s one thing for people to place their faith in a company and release vast amounts of personal data on public fora, but it is another thing for such a company to not safeguard user data, and in fact, consider itself the sole proprietor of such highly sensitive information.
It seems unlikely that the outcome of a picture you’ve shared of your neighbor’s dog could be Mr. Donald Trump being elected President of the United States or Great Britain no longer being a part of the European Union. However, each of these tiny bits of data can go into placing carefully manipulative ads targeted at micro profile voters. Even if Facebook was but an innocent victim of this machination by Cambridge Analytica, the ease with which it was fooled into giving up its data is alarming.
Furthermore, the fact that people aren’t being paid to give access to data that is rightfully theirs, that too data that is being shared by them with a belief that it won’t be misused, is wrong in itself. The violation is multifold- first, people aren’t being made aware of the revenue their information is generating. That knowledge is enough to set them seeking the extra monies, which they’re in their right place to claim. Furthermore, the information that they post on such a platform is done in the faith that it won’t be misused, which was cognizantly violated by most of the parties involved. In such a case, the onus of protection of data can’t be conveniently placed on users, rather, it ought to be placed on these organizations. When this was supposed to be done, the firms involved skirted responsibility for safeguarding user privacy and information.
At this stage, we must realize that the debate surrounding Facebook’s blatant disregard for user privacy was not that of the lack of data protection, but that of the enormous amount of power being wielded by the media giant. This was evident in the line of questioning faced by Mr. Mark Zuckerberg in the much-publicized address and interrogation with publicly elected representatives. They might have been speaking for all of us when they asked Mr. Zuckerberg about how this breach of data protection could affect minors and even those who explicitly wanted their data protected by the giant, and Facebook didn’t have a convincing answer.
Facebook outright denied any knowledge of how this data was going to be misused, but it can’t be considered blameless in this fiasco. Surely, common users might not have been fully aware of how their information was misused, but Facebook could have avoided being caught in this imbroglio with necessary precautions taken, with steps as simple as conducting background checks on the funding of its third-party user information-collecting clients, and the scope of their research. Cutting corners in areas such as these led to what will be seen in the next section.
The Downward Spiral
Events took a nasty turn for Facebook in the year 2018. Since the scandal involving Cambridge Analytica, there have been many more instances where Facebook has been mired in ethical, moral and social controversies.
The role of Facebook in aiding the election campaign of Donald Trump is widely controversial. In addition to Cambridge Analytica, Russian Agencies allegedly made use of Facebook to target the presidential election campaigns and probably influenced the results. How deep was the influence is still debated; however, the point remains that Facebook was designed to connect all the stakeholders all around the world or at least that is what Mark Zuckerberg has said. If this popular platform is used as a weapon of psychological warfare, then Facebook needs to take a hard look at its shaky ethical foundations.
United Nations in March 2018 blamed Facebook as a medium for spreading fake news about Rohingya Muslims who were systematically slaughtered and forced to leave. The Sri Lankan government even ordered internet providers to ban Facebook following anti-Muslim violence. It really begs the question, “where are the checks and balances on such a huge platform?” Responsibilities come coupled with all the power and fame that we enjoy so much.
Mark Zuckerberg, the CEO of Facebook had to appear before Congress in April 2018 to answer many difficult questions regarding data privacy and the role his company played in Presidential campaigns.
In May 2018, it was revealed by the New York Times that Facebook had made a deal with various device manufacturers to sell the data of the users that it collects from its platform. The data that Facebook generates belongs to its users and without their explicit permission, it is unethical to sell it. It faced a lot of criticism due to the same reason.
After being in so much controversy, the Facebook quarterly reports in July 2018 caused its stock to fall nearly 20% amid fears of slowing growth and negative publicity. The controversies had finally caught up with Facebook and now affected it financially.
In September 2018, Facebook was accused of allowing employment ads to favor men over women. A similar controversy was regarding excluding certain ethnic sections of society from viewing housing ads. All these controversies point to a deep underlying malaise that this platform was created without having a vision from an ethical and moral viewpoint. Else, checks and balances to ensure such discrimination and misuse of the platform doesn’t take place would have been incorporated.
In September 2018, Instagram founders Kevin Systrom and Mike Krieger quit from the company. They added to the list of founders who have left Facebook such as WhatsApp and Oculus founders. It certainly raises a doubt that maybe the values of these founders did not align with the profitability mindset of Facebook. In the same month, hackers gained access to close to 30 million Facebook accounts. An online platform as big as Facebook is expected to take data privacy issues seriously. Not only it is blatantly selling users’ data to third parties, but it is also indifferent to the security measures that should have been in place right from the start.
In November 2018, Facebook was accused of working to hush the evidence regarding the impact of Russian interference on the Presidential campaigns using its platform. Facebook COO, Sheryl Sandbag was specifically named in this allegation. It gives an idea of the value system that drives Facebook. If there are allegations of this sort against the top management, can we expect the company to transform overnight despite the desperate assurances of its CEO?
In December 2018, it was announced that a Facebook bug was responsible for exposing the users’ photos to third party apps without the explicit consent of the users. This bug was patched in September, however, Facebook decided to wait for two months before making this information public. It clearly demonstrates the lack of transparency and accountability on the part of the top management of Facebook.
In December 2018, another scandal-hit Facebook. Despite assuring users that Facebook has cut off access to users’ data to third parties, it came to light that Facebook was involved in sharing a lot of personal information with large companies like Amazon, Microsoft, etc. It clearly unveils the mask of morality and authenticity that Facebook propounds.
In March 2019, Facebook disclosed that a security lapse caused hundreds of millions of passwords being stored in plain text. Although Facebook claimed that no passwords were leaked, however, a report by a security officer Brian Kerbs claimed that between 200-600 million users were affected. It signifies the potential that this platform has to cause worldwide damage. Too much centralization of data along with little willingness to hold responsibility has brought us to this stage.
In July 2019, lawmakers in a House committee on Financial Matters expressed mistrust of Facebook’s Libra cryptocurrency due to its pattern of mishandling users’ data. It clearly shows the lack of trust of the government and the public in handing over the responsibility of so much data.
So many scandals have hit Facebook that the reputational loss is irreparable. However, it must try to make its platform sensitive to data privacy. Europe’s GDPR will certainly force companies like Facebook to take concrete action. Other governments should also take note of these regulations and force action. Companies can sometimes get lost so much in the pursuit of profit and revenue that they forget who they must serve: the users.
Analysis & Conclusion
Most major tech firms, majorly in the USA, have been historically accused of mishandling user data. A lot of these firms rely on this data for revenue and have been blamed for selling data to third-party organizations without taking permission from the users. This is a direct breach of privacy, a major ethical and legal offense. Ever since Facebook took the world by a storm, these accusations have been doing the rounds. But, nothing major came out until 2015 when it was reported in the Guardian that Cambridge Analytica, a political consulting firm, harvested data from millions of Facebook accounts, without the users’ permission. Soon other major dailies also came up with similar stories and the scandal was exposed. The intention of Cambridge Analytica was to use the data to selectively influence voters during the election campaign for Donald Trump.
Colluding with a firm and compromising on the privacy of your customers, can never be deemed correct, morally or ethically. The biggest problem was that this was done without the consent of the user.
Post-2018, when the news of this spread worldwide, Facebook had to face a major backlash, with people deleting their accounts entirely. The company’s negligence and inaction resulted in the violation of the most basic cornerstone of the customer-company relationship: Trust.
Trust is the key to establish a moral and ethical work environment. Trust is also of importance to the customer. Customers will only buy the product/service offered if they believe in it. Similarly, for Facebook, the one reason why they had such a large scale of users is that people trust them with their information. People share pictures of Facebook, converse on Facebook messenger, all-knowing that the conversation will not be revealed to the outside world. Moreover, this is not an assumption, it is actually the claim of the company itself.
This scandal made the users question the integrity of the company, with much-losing faith and deleting their Facebook accounts. Facebook was not considered a virtuous organization anymore. Transparency leads to trust. Transparency is company not hiding any information with the user. Though Facebook claims that whoever participated in the personality test was aware of the consequences, everyone knows the way the user agreements are framed, it is very easy for people to miss out on details. In fact, most people don’t even read these agreements, simply because they trust organizations.
The scandal also brings into light the ethics of leadership. The leader is the flagbearer of the company’s values. Therefore, the actions of the leaders have direct implications on the perception of the company. In this specific case, Mark Zuckerberg was generally perceived in a very positive light by most people. This event made people question his authenticity.
Consistency, according to most philosophers, defines authenticity. If an individual is consistent in how they behave and how they express themselves, people automatically get attracted to them and follow them. A good leader is always consistent. Though Mark personally apologized later, the scandal also exposed the stark inconsistency in his perception and behavior. As someone in a position of power, failure to prevent such action by the companies’ partners and not intervening to limit the misuse are major ethical failures.
An authentic leader is also expected to conform to social standards. Facebook has been accused of not having strict enough standards to ensure only individuals above the age of 18 join. In the data breach scandal as well, it was revealed that information of 13-year olds was shared as well. This generated a huge public outcry. Despite all of this, when asked about whether a law should be passed to ensure 13-year olds do not join social media platforms, he responded in a way that reflected how he is only focused on making profits. He was against the proposal, which shocked the public even more.
At the company level, this brings into question the values. Facebook’s five values, as described by Mark Zuckerberg are: be bold; focus on impact; move fast; be open; and build social value. Though the first four values are focused on the business aspect, the last one talks about society in general. The work Facebook does, it does to make the world a better place. A breach of privacy and the prospect of other firms getting access to confidential and private user data is the opposite of adding social values. If a firm cannot conform to its own values, how can it be expected to conform to the more generic expectations set by society?
Further, the company’s actions cannot be justified based on any existing ethical theories. The utilitarian principle which was applied to partially justified the actions of the US government to spy on its citizens for the purpose of national security is invalidated in this case. On the contrary, the companies action resulted in subverting the principles and tents of democracy where the public mandate was twisted to suit the powers that be. This has resulted in shaken faith in a democratic system by the public. the actions of the company have not resulted in the impairment of trust between the company and its consumers but distrust between the consumers and its government.
An inquiry into the motivation and reason behind Facebook’s negligence and Cambridge Analytica’s fraudulent practices results in the conclusion of plain and simple corporate greed. Cambridge Analytica continued in these fraudulent despite accusations flowing in media since 2015 was the inordinate and non-scalable benefits of these practices of getting a favorable president elected which can safeguard them from any penalties from lawmakers and justice system. On the other hand, a majority of facebook’s revenue stream is based on selling analytical results and insights to its corporate customers. Further, its initial reaction of denial and displacing blame from the scandal indicates that its leadership believed that the verifying the authenticity of the campaigns and information on its platform does not fall under their purview. They just provide a platform for their customers to communicate. Additionally, the changes and commitments made by the company in view of the scandal further lack the authenticity and are externally driven as they are a result of subsequent customer backlash and outrage. Thus, the measure and commitments made by the company to correct do not inspire confidence in their ability to prevent such future mishaps. Additionally, though Cambridge Analytica is liquidated as of date, its successor, Data Propia, which comprises of minds behind Cambridge Analytica (CA) has emerged which would be aiding in the Donald Trumps’ 2020 election campaign. The suspicions regarding reusing the previously collected data by CA are still heavy in the air. Also, the minds behind this theft and negligence, such as Robert Mercer, Steve Bannon, and beneficiaries of scandal such as Ted Cruz and Donald Trump has suffered no legal consequence. This will further promote the companies and persons to engage the services of Facebook and firms like Cambridge Analytica to subvert and manipulate public opinion to their benefit.
Finally, at the global level, the entire incident portrays a very gloomy picture, of what the future could be. With the major corporations knowing everything, they can hold the entire world to ransom. It is imperative for the Governments of the world to intervene and install mechanisms to ensure data protection. Right now, user data is generally only being utilized to selectively sell products to customers. As long as, we can ensure that this is the only way companies will use data, we can prevent data leakage. This is still very risky, as if this data gets into the wrong hands, then it’s a disaster. Therefore, the ethics of the process of data collection itself should be questioned. Is it ethical for firms to store information about their customers and to share it with whoever offers the highest price?
To conclude, collecting information and sharing it with others irresponsibly can never be considered ethical. It is a violation of trust, consent, and a breach of privacy. Such a breach allows for further morally reprehensible behavior on part of the corporations. Thus, there is an urgent need for laws to ensure the protection of data, otherwise, we are headed into a dark future: a world without trust and values.
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