News You Can Use: The Facebook Files
Today, we’re going to be kicking off a semi-recurring feature here on the CallRail blog: News You Can Use. In this series, we’ll do a comprehensive roundup of the latest news in tech and marketing, and explain what the upshot might be for your business.
We’ll be keeping the commentary to a minimum here — each story will be presented as a brief summary that includes a link so you can read more.
This week we’re focusing on the latest dust-up around Facebook, which is coming under scrutiny for how it handles user privacy and sensitive data. It’s an especially relevant topic for those of us who work in digital marketing, because the fallout of this story could have big ramifications for our industry.
So, without further ado, the top recent stories around Facebook’s data woes:
In a sprawling exposé for The Guardian, an ex-employee of the political consulting firm Cambridge Analytica revealed that his former employer had surreptitiously (and possibly illegally) downloaded the personal data of more than 50 million Facebook users. Cambridge Analytica did this by exploiting a vulnerability in the permissions Facebook grants to connected apps — in this case, a quiz app that harvested all of the contact of for those who took it.
The Guardian’s report has set off a firestorm of criticism around Facebook, prompting renewed calls for regulation of the tech giant’s business activities. This report will almost certainly spur legislative or regulatory action in the European Union, but the picture for the US is still unclear.
In a surprise move, Facebook CEO Mark Zuckerberg called for tighter regulations around advertising on the platform. This was Zuckerberg’s first sit-down interview since the Cambridge Analytica story broke, and he seemingly sought to pre-empt criticism by addressing the elephant in the room: The growing chorus of calls for regulation of Facebook.
“This was a major breach of trust and I’m really sorry that this happened,’ Zuckerberg told CNN’s Laurie Segall.
In an announcement that rocked the tech world, the United States Federal Trade Commission confirmed it is investigating Facebook for potential privacy violations.
“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers,” the organization said in a statement. “Foremost among these tools is enforcement action against companies that fail to honor their privacy promises, including to comply with Privacy Shield, or that engage in unfair acts that cause substantial injury to consumers in violation of the FTC Act. Companies who have settled previous FTC actions must also comply with FTC order provisions imposing privacy and data security requirements.”
The scale and scope of the FTC’s case will likely become clear in the coming weeks. If their investigation turns up serious violations or infractions, Facebook may be facing hefty fines in the near-future.
4) UK investigators complete 7-hour Cambridge Analytica HQ search (The Guardian)
Off the back of their whistleblowing report on Cambridge Analytica, the Guardian has reported that UK police have raided the consulting firm’s headquarters as part of an investigation into the Facebook data leak.
At 3:00am (UK time) on March 24, enforcement officers from the country’s Information Commissioner’s Office (ICO) searched the firm’s office. Investigators were reportedly seen taking forensic photographs and conducting interviews with Cambridge Analytica staffers.
The move is almost certainly the opening salvo in what will be a wide-ranging UK inquiry into Facebook’s business, their privacy practices, and their handling of sensitive user data.
Following the revelations of the Cambridge Analytica data scandal, Facebook’s stock share has slid dramatically. The company is down nearly $100 billion in market cap — or more than 15% in stock value — since the Guardian’s report broke in mid-March.
Analysts at Fortune and CNBC predict that, barring any more surprises the stock should bottom out soon and begin climbing in value again. However, if more bad news arrives or the company announces a major staff shakeup (like the resignation of CEO Zuckerberg), their stock value could be in for a bumpy ride over the next few weeks.
In a surprise announcement, Facebook said it is ending its business relationship with third-party data brokers. The move also ends the ‘Partner Categories’ program the company launched in 2013.
This kind of third-party data is used extensively by digital marketers, both on Facebook and beyond, for audience segmentation and ad targeting. As TechCrunch reported: “In order to leverage the deep pool of data Facebook collects on users, the company mixes information that it obtains from users themselves (Pages a user liked, for instance) with information from advertisers (membership status in a loyalty program, for example) and with data obtained from third-party providers.”
For now at least, that third-party data will no longer be available to marketers running targeted campaigns on Facebook.
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