Voted Best Sexual Harassment Training Solution in 2021 by The Balance SMB

Facebook Data Privacy Scandal: Here's What You Need To Know

Cloud computing, workforce mobility, and digital data storage are some of the terms you will find flying around in today's business world. The increased reliance on the digital space for almost everything business-related, be it accounting and finance to training, has left businesses vulnerable to data breaches.

Businesses and companies are increasingly storing sensitive user data on cloud servers and enterprise databases with the assurance that it is safe from hackers. But, with just the simple act of gaining access to restricted networks, a hacker can easily expose the business data for all to see. That is why training for data privacy is becoming more and more important for businesses to take. 

The data breach experienced by Facebook at the hands of Cambridge Analytica was such a massive blow to people's confidence and trust in the social media giant and digital platforms in general.

The scandal caused such an uproar that by the end of 2018, Facebook had paid a considerable fine, and Cambridge Analytica shut its doors.

The Facebook-Cambridge Analytica data privacy scandal details

Facebook experienced its biggest crisis ever in March of 2018 when a cache of documents inside Cambridge Analytica made its way into the hands of the New York Times. These documents were proof that Stephen K. Bannon, a board member of Cambridge Analytica and a former Trump aide, had illegally obtained data from tens of millions of Facebook users and used it to create voter profiles.

A 2014 report by The Times alleged that the employees at Cambridge Analytica, in a bid to sell psychological profiles of American voters to political campaigns, had illegally acquired the private data of Facebook users. This is even after receiving a warning about violating American election law (as the campaigns usually employ Canadian and European citizens) from their lawyers.

Here are more details about the scandal:

The Russian Involvement

The Times report claimed that even as Cambridge continued to build voter profiles derived from Facebook data, it and its British affiliate, the SLC Group were in contact with the Kremlin-linked oil giant, Lukoil.

Company insiders claimed that Lukoil was very much interested in how data was used to target the American voters. Lukoil, however, denied any involvement in the interference of the US elections claiming that there were no political talks with Cambridge.

However, the Washington data privacy lawmakers were already investigating Russian involvement in the 2016 elections and demanded that Facebook CEO Mark Zuckerberg appear before congress to respond to the allegations.

The Trump-Cambridge connection

Besides Bannon, John Bolton, the National Security Adviser and handpicked by the then-president Donald Trump, also had ties to Cambridge Analytica.

The Times, upon further investigation into the relationship between Bolton and Cambridge Analytica, broke the news that John Bolton received early versions of its Facebook-derived profiles from Cambridge.

Armed with this information, John Bolton's "super PAC" supported candidates who made and used ads developed by Cambridge Analytica.

The Times did another report on a supposed partnership between Palantir and Cambridge Analytica. Although the deal fell through, the report alleged that a Palantir employee continued to work with Cambridge to harvest Facebook data to build Psychographic profiles of the American voters.

This was of interest because Palantir Technologies was founded by Donald's supporter and backer Peter Thiel.

The Brexit-Cambridge-Facebook equation

A former Cambridge employee, Christopher Wylie, while testifying in parliament, contended that the British political consulting firm helped swing the referendum results in favor of the withdrawal of Britain from the European Union.

Two senior advisers to Prime Minister Theresa May were implicated in the story, with both The Observer and the Times alleging that the Brexit campaign used a contractor from the consulting firm to help skirt the spending limits of the campaign.

The British lawmakers also began investigations on Cambridge Analytica's role in the country's referendum to leave the EU.

How was the data collected?

While many assumed that their data was collected via a simple Facebook quiz, The Times reported that an app was actually used. The 'This Is Your Digital Life' App was the culprit.

Qualtrics, a company that manages online surveys, provided a psychological questionnaire. The users were required to grant access to their Facebook profiles in order to fill the questionnaire. The App then collected the users' and their friends' data once they gave access.

The aftermath of the scandal

Facebook's day of reckoning

Mark Zuckerberg, Facebook's CEO and the man with total control of the world's largest communication platform, addressed the public five days after the scandal broke out. People were naturally expecting for him to speak out immediately, and the fact that he appeared almost a week after the fact baffled everyone.

Senators later grilled Zuckerberg in a hearing on various issues regarding the company's privacy policies and its business practices. Facebook's monopoly over the communications platforms was also brought up.

FTC fines Facebook

According to reports, as of July 2019, the US Federal Trade Commission (FTC) approved an estimated $5 billion settlement with Facebook over its investigations into the social media giant's handling of its users' data.

The FTC had been investigating the allegations of Facebook sharing about 87 million users with Cambridge Analytica, a British political consulting firm, now defunct. The investigation concentrated its efforts on finding out whether Facebook violated a 2011 agreement between FTC and itself.

While FTC fined Facebook, the Justice Department's Civil Division needed to finalize the settlement details, with it being the largest that the FTC had ever levied against a tech company.

A public outcry and a call to arms

Alongside the data privacy scandal, Facebook also faced claims of misinformation on its platform. There public also called for the government to force Facebook to sell Instagram and WhatsApp, which Facebook acquired in 2012 and 2014, respectively.

The scandal prompted prominent personalities such as Steve Wozniak, the co-founder of Apple, another tech giant, to urge people to find a way to get off Facebook.

Its planned cryptocurrency Libra faced criticism from the president over concerns of privacy as well.

The end of the road for Cambridge Analytica: A timeline

In 2013, a Cambridge academic Aleksandr Kogan developed the "This Is Your Digital Life" app. The data of 300,000 users and their friends were mined by the App when the users took the psychological exam in the form of a questionnaire. Global Science Research, the company that Kogan worked for, now had access to data from 87 million Facebook users.

Ted Cruz's campaign was reported to be using Cambridge Analytica to apply psychological data gathered from Facebook users to gain an edge over Donald in 2016.

Before the 2016 US elections and the time leading up to it saw Donald Trump's campaign invest in Facebook ads with Cambridge Analytica taking credit for the "Defeat Crooked Hillary" video ad that was circulating on Facebook at the time.

In 2018, FTC opened investigations on claims that Cambridge Analytica harvested and used Facebook user's data to build psychographic profiles of American voters.

The senate questioned Facebook CEO, Zuckerberg, FTC levied a heavy fine on Facebook. Zuckerberg and the company gave numerous apologies to the public, and Facebook still stood firm amid it all.

But for Cambridge Analytica and its parent company, the SCL Group, it was the end of the road. The scandal and consequent collapse of Cambridge Analytica had a significant impact on the Mercers, particularly on Robert Mercer, who had invested $15 million in the company, and his daughter, Rebekah, who was a board member.

2021, another Facebook Scandal

After three years and billions of dollars in fines for failing to protect users' data, Facebook was at it again in April of 2021. This new scandal involved the theft of data from half a billion of its users.

The data stolen included the users' personal data such as their birthdates, phone numbers, email addresses, and full names. The hackers then posted the data online for people to see and use it for free.

After The Times reported Cambridge harvested data of millions of its users to target voters with political ads in the 2016 elections, Facebook had vowed to crack down on mass data-scraping. This new scandal pokes holes in Facebook's credibility. It leaves people questioning whether they can trust Facebook and seriously considering Steve Wozniak's words.

This new scandal just goes to show how profoundly all systems of accountability have failed and continue to fail.

Parting words

Data breaches have become far too common in recent years. Alongside Facebook, other tech companies such as eBay, Linked In, and Adobe has been vulnerable to hackers in recent years.

People usually sign-up to companies like Facebook, a reputable company, with the assurance that their data is safe and will not be used indiscriminately. It is, therefore, a massive breach of trust and privacy when users find out that their personal data has been leaked and used for nefarious reasons.

Social media platforms should take the initiative and notify their users so that they are alert and look out for phishing scams that may use their personal data in fraudulent ways.