Facebook has recently been under fire for its handling of the Cambridge Analytica scandal. It can be difficult to understand and follow all of the events that took place. To start, in 2015 Global Science Research, a company owned by Aleksandr Kogan, harvested the data of 270,000 users who willingly sold their information to the company through the app “thisisyourdigitallife.” This was done in a legal manner and in line with all government regulations because the users voluntarily sold their data. However, the app also unknowingly harvested the data of the friends of these users. This is also compliant with Facebook’s policy, as the data of friends can be mined for use by app developers and academics. The data was then sold to Cambridge Analytica, which is a violation of Facebook’s policy on data mining. Christopher Wylie, a co-founder of Cambridge Analytica, blew the whistle on the events which led to national coverage of the issue. On March 16 of 2018, Facebook recognized the situation and suspended Cambridge Analytica from the website for selling the data to a third party. The tech firm reaffirmed that this was not a data breach as the users who downloaded “thisisyourdigitallife” voluntarily consented to having their data mined; the data of their friends should not have been sold to Cambridge Analytica. A day later, Cambridge Analytica issued a statement saying that it deleted all of the data it had received from Global Science Research after learning that it was not obtained in compliance with Facebook’s data privacy policies. Facebook CEO, Mark Zuckerberg, has since issued apologies in newspaper advertisements, stating that this was a “breach of trust,” and has agreed to testify before Congress about the matter on April 11.
Since Christopher Wylie blew the whistle on the scandal, Facebook has been rapidly losing value. The share price has dropped from $185.90 to as low as $152.22 as the news broke on March 16. This 18% decline in share price has caused Facebook to lose $80 billion in value, and Mark Zuckerberg’s net worth has also declined by $14 billion. With new facts about the scandal being uncovered every day, Facebook’s stock could face a major decline in the coming weeks. Mark Zuckerberg plans to have his Congressional hearing in April; he will hopefully be able to reassure users, investors, and the government that Facebook is capable of safely guarding the information of its users if he wishes to avoid further decline in share price or lawsuits.
Facebook and all tech companies need to make it their number one priority to safely secure the information of its users and customers. It is their duty to ensure that our information will not be sold without our consent. Hopefully the steep decline in Facebook’s share price will result in a wake-up call for the tech firm to increase its data and information security. Data privacy has been a hot-button issue lately with recent data breaches at Uber and Equifax receiving a high amount of national attention. After Equifax’s breach of data in September of 2017, the share price dropped dramatically, from $142.72 to $92.98 in the matter of 8 days after the news broke, leading to the company losing over $5 billion in value. This breach caused Equifax to lose nearly one third of its value all because the company failed to protect the information of its customers. Facebook stands out amongst these, as the information sold to Cambridge Analytica was used to create and target specific political advertisements for then candidate Donald Trump. Regardless, Facebook and all tech firms need to improve their policies and procedures when it comes to data privacy to avoid losing billions in value after data breaches.