Facebook advertisers have threatened to abandon the platform in the wake of a massive data harvesting scandal which began after it was revealed that an app created by two psychologists – one of whom Facebook employs – gathered data on over 50 million Americans and then sold it to political data firm Cambridge Analytics and several others, who used it without consent.
Mark Zuckerberg, co-founder and CEO of the social media giant gave several interviews Wednesday after spending three days in hiding, ostensibly with a crisis management team which advised him not give wholly unsatisfactory answers to one of the largest data breaches in history.
The scandal is pushing some Facebook advertisers to consider dropping the platform, reports The Times.
ISBA, a British group of advertisers that spend hundreds of millions of pounds a year on Facebook, demanded answers. It is understood that some of its 3,000 brands, which include those of the consumer goods companies Unilever and P&G, will not tolerate association with Facebook if it emerges that users’ data has found its way into the hands of brokers and political campaigners without authorisation. Sources close to the trade body said that if the company’s answers were not satisfactory, advertisers might spend their money elsewhere. ISBA will meet Facebook executives this week.
Others, such as Mozilla – the company behind the Firefox browser – have already pulled out, or as it said have “pressed pause” on Facebook advertising. In a scathing post, Mozilla said that “when Facebook takes stronger action in how it shares customer data, specifically strengthening its default privacy settings for third party apps, we’ll consider returning.” Until then, “Mozilla will advertise elsewhere” as it warned in a blog post this morning:
Mozilla is pressing pause on our Facebook advertising. Facebook knows a great deal about their two billion users — perhaps more intimate information than any other company does. They know everything we click and like on their site, and know who our closest friends and relationships are. Because of its scale, Facebook has become one of the most convenient platforms to reach an audience for all companies and developers, whether a multibillion corporation or a not-for-profit.
We understand that Facebook took steps to limit developer access to friends’ data beginning in 2014. This was after Facebook started its relationship with Cambridge University Professor Aleksandr Kogan, whose decision to share data he collected from Facebook with Cambridge Analytica is currently in the news. This news caused us to take a closer look at Facebook’s current default privacy settings given that we support the platform with our advertising dollars. While we believe there is still more to learn, we found that its current default settings leave access open to a lot of data – particularly with respect to settings for third party apps.
We are encouraged that Mark Zuckerberg has promised to improve the privacy settings and make them more protective. When Facebook takes stronger action in how it shares customer data, specifically strengthening its default privacy settings for third party apps, we’ll consider returning.
We look forward to Facebook instituting some of the things that Zuckerberg promised today
Meanwhile, Facebook shares remain under rising pressure – falling approximately 8.6% in three trading sessions and down again on Thursday premarket as investors – particularly “ethical” investment funds – reconsider their decision to hold the increasingly radioactive company.
Nordea, the largest bank in the Nordic region, which manages about £283 billion (~$400 billion USD), said that it had put some of its Facebook investments in “quarantine” while it assessed the scandal. Union Investment, a German group that manages about £255 billion ($360 billion USD), said that it was reviewing its holding of Facebook shares. –The Times
Investors have also launched several lawsuits against Facebook, claiming that the company made “false and misleading statements” regarding its privacy policies and who they share data with.
Revenue was $3.7B in 2011, and over $40B in 2017. They had a 1 billion users then and now have 2 billion users. The question is revenues went up 11x while users went up 2x. Are we sure they just sell ad space?……I am guessing they sell data…your data! pic.twitter.com/WiAFcOUMDu
— Ed (@DowdEdward) March 21, 2018
One San Francisco shareholder, Fan Yuan, filed a lawsuit on behalf of an undisclosed party of investors who claim that Facebook’s “omissions” led to a “precipitous” decline in the company’s stock price – wiping out nearly $50 billion of value on Monday and Tuesday.
A Maryland woman who said that she was “frequently targeted with political ads while using Facebook” during the 2016 US election filed a separate suit against Facebook and Cambridge Analytica, alleging that the companies had treated her personal data with “absolute disregard”. Cambridge Analytica denies that it used Facebook data to “microtarget” political adverts when it worked for the Trump campaign. –The Times
Yesterday, WhatsApp co-founder Brian Acton, who Mark Zuckerberg turned into a billionaire after Facebook bought his company for $22 billion, is now telling people to delete their Facebook accounts, promoting hashtag #deletefacebook.
It is time. #deletefacebook
— Brian Acton (@brianacton) March 20, 2018
Action was referencing the online movement that is gaining steam in the wake of the data harvesting scandal.
After staying on for three years, Acton quit Facebook in September, and is now a major backer of rival messaging service Signal, which boasts encryption to make its messages resistant to government surveillance.
In a Wednesday night interview with CNN, Zuckerberg admitted that Facebook “made mistakes,” and that “This was a major breach of trust and I’m really sorry that this happened. Our responsibility now is to make sure this doesn’t happen again.”
Zuckerberg also vowed to notify all users “whose data might have been affected” by the breach, and will be “happy” to testify before congress “if it’s the right thing to do.”
— CNN Breaking News (@cnnbrk) March 22, 2018
Zuckerberg said in a Facebook post that he has pledged to investigate suspicious apps and ban developers who violate data sharing rules or refuse to comply with an audit. He added: “We will restrict developers’ data access even further to prevent other kinds of abuse. For example, we will remove developers’ access to your data if you haven’t used their app in three months. We will reduce the data you give an app when you sign in — to only your name, profile photo and email address.”
“We’ll require developers to not only get approval but also sign a contract in order to ask anyone for access to their private data. We’ll have more changes to share in the next few days.”
That said, tens of thousands of apps could be harvesting data…
Yesterday Dr Kogan, the Russian-linked Cambridge academic who obtained the data of 50 million users by offering “personality quizzes” before selling the data to Cambridge Analytica, told the BBC that “tens of thousands” of apps could have done the same thing.
A Facebook whistleblower told MPs that the company had ignored his warnings and lost control of users’ data by giving easy access to developers. Sandy Parakilas said that when he worked at the company in 2011-12 “personal identifiable data was basically allowed to leave Facebook”. He told MPs that he had warned executives that poor safeguards could enable foreign powers or data brokers to harvest data. –The Times
ISBA notes: “The claims that other apps using the Facebook platform, and pre-dating 2015, have collected similar bodies of personal data and that controls for distribution have been inadequate, raise questions about the possibility that Facebook data has been, or is being used improperly elsewhere. ISBA is asking Facebook for a full account.”