USA TODAY International Edition
Newest crisis has Facebook reeling
Public less forgiving of data breach scandal
SAN FRANCISCO – Facebook used to be the Teflon company. Nothing negative could stick to it.
Fabricated news that misled millions? Homicides, gang rape and terrorism broadcast live? It didn’t matter. Users, advertisers and investors couldn’t help but like Facebook, one of the planet’s largest and most powerful companies powering one of the most lucrative advertising businesses anyone has ever seen.
But ever since Russian operatives exploited the social media giant to influence the presidential election, Facebook is not bouncing back the way it used to. The drumbeat of problems — racist targeting of ads, the spread of fake accounts, people spending less time on Facebook and enjoying it less — have been pummeling the Silicon Valley company to the point that CEO Mark Zuckerberg had to pledge he’d spend 2018 just trying to fix everything that’s gone wrong.
Then came bombshell reports from
The New York Times and the Guardianowned Observer over the weekend alleging the data analysis firm that helped Donald Trump win the White House had improperly obtained and kept the personal information of 50 million Facebook users without their permission.
Growing outrage over the misuse of private information has plunged the company into full-blown crisis, with U.S. and European lawmakers demanding hearings and the Federal
Trade Commission investigating.
The controversy struck a nerve because the American electorate’s personal information was exploited for political gain on behalf of a deeply divisive public figure, observers say.
“The current political environment surrounding the Trump administration has raised the stakes,” said Harvard Business School professor David Yoffie. “There is a lower willingness by consumers, investors, and even U.S. government agencies to tolerate serious policy violations today than there was six months or a year ago.”
That’s why the Cambridge Analytica data breach will be a source of “great public interest and intense scrutiny going forward,” said Michael Useem, a professor at the Wharton School at the University of Pennsylvania.
Peter Crist, chairman of the executive search firm Crist Kolder Associates, says a line was crossed when a company was able to amass so much data “in a major way unbeknownst to them.”
“They previously thought, as did their constituents and various audiences, that they controlled, owned, managed the processes and the data,” Crist said. “Not so much anymore.”
One unhappy user is Tommy Lei of Los Angeles, a 29-year-old menswear fashion blogger who uses Facebook to stay in touch with friends and promote his business. He says the mishandling of Facebook users’ data “in an ulterior and nefarious manner during the presidential elections” has opened the floodgates for “more potentially manipulative social and digital campaigns in the future.”
“My hope is Facebook and other social media platforms be more transparent about how our personal data is being utilized from a research and app-driven perspective and openly conduct outreach to educate those who are uninformed on the subject matter,” Lei said.
But Zuckerberg and Chief Operating Officer Sheryl Sandberg remained silent as criticism rushed in from lawmakers in the U.S. and Europe and Facebook shares plunged.
Employees are getting worried. Facebook scheduled a meeting for them to ask questions of one of the company’s lawyers on Tuesday morning, according to The Verge.
Late Friday, the company tried to get ahead of media reports by putting out a blog post that it had received reports that Cambridge Analytica hadn’t deleted the user data and that it had suspended the firm. The next day, a reporter at the Observer called out Facebook for threatening to sue the paper to stop publication.
Comments on Twitter from executives did little to clarify what happened or reassure the public.
Facebook’s second blog post on Monday, saying Cambridge Analytica had agreed to an independent audit, had to be walked back when the auditors had to cease work as the U.K. Information Commissioner’s Office pursued its own investigation.
Yoffie says he’s skeptical there will be long-term fallout.
“For many of the 2 billion consumers on Facebook, there are no easy alternatives,” he said. “While Millennials ‘multi-home,’ meaning they are already participating in multiple social networking sites, most of Facebook’s user base are heavily tied to the site. Switching would be hard.
“Of course, if Facebook fails to address the broader privacy concerns, those switching costs could be overcome.”