Facebook Inc is going to pay a price from the Cambridge Analityca’s affair that it much higher and different from potential reprimands or sanctions. The real issue is whether users will continue to share their data and accept monetization by Facebook itself and its customers, as it was so far.
It is difficult to foresee whether legal and political investigations about Cambridge Analytica misuse of data will ever reveal an infringement of law by Facebook. Remarkably, it seems that the way of CA’s accessing data of Facebook users was in line with common business, at least pursuant the conditions imposed by Facebook at that time. This means that many other companies have been monetizing personal data of users in the same way, and Facebook made a gain from it. This is not a scandal , this is the way Facebook and, in general, social networks function.
Facebook’s liability may eventually arise if one could prove that executives of the social network were aware about the misuse of data by CA and could stop it in time, but it was not done. This is something, however, which cannot be assessed for the time being. As far as we understand, only CA and its affiliates – and non others – misused and manipulated data against laws and contractual terms, therefore only CA will eventually pay the price for it, if any. However, recent news that Facebook may have infringed a privacy settlement signed in 2011 with the FTC may complicate the scenario.
Retaliation against Facebook may happen also by way of regularity intervention over its business, for instance in the area of algorithm transparency, data protection enforcement, increased platform liability requirements (for instance in the area of fake news). All such consequences are possible but would and should be attentively scrutinized, because regulating the Internet just to condemn Facebook will bring huge collateral damages.
This said, the real question for Facebook is not about compliance, but general responsibility. The company’s initial reactions to the scandal were clumsy and not at the standard you would expect from a company of that value (500 billion bucks). Facebook simply intervened to make clear that there was no breach of data, that their contractual terms protected rights of users and that violations, if any, were committed by somebody else. That’s it.
This was clearly a poor reaction, underestimating the shock that the CA’s affair created within people and politicians, in US and elsewhere. It would have been much more appropriate for Facebook’s founder to intervene personally* and state that the protection of data users, within and beyond the limits of applicable data protection laws, lies at the heart of the social networks business. Mr. Zuckerberg owns the rare skill to be able to speak directly to half of the mankind and to their friends of family, then it would have been a good occasion to use his superpowers. This was not done and probably now it is too late, even if the invitations to speak in London and Brussels will be finally accepted.
Facebook’s users may be also disappointed about the care showed by Facebook in the present case: while it is true that Facebook’s terms and conditions prohibited its customers to deliver users’ data to third parties, it is evident that without an active scrutiny by Facebook such guarantee may be useless (as it happened in the present case). Facebook should clarify if they are able to put in place a more effective supervision of their customers using personal data of people.
This, it is likely that, following the present affair, an important part of Facebook’s users will become more suspicious. They may leave the network or radically decrease their activity on it. This is an horrible news for Facebook which is already facing a stable decline of users’ traffic for other reasons.
Users’ disaffection: this is the bomb which is going to affect the main world social network and that investors have already perceived, since Facebook’s shares are going down. Unlike Apple, Amazon and Google, one could argue whether Facebook business has a bright future or, instead, it is risking the same unhappy end of MySpace.
* Nicely to see, but too late (as I mentioned), Facebook’s founder Zuckerberg finally intervened some hours after my post: