Executive Summary
Facebook CEO and founder, Mark Zuckerberg, has recently been in the hot seat for the data scandal that is affecting his company. Mark Zuckerberg appeared in front of the Congress for questioning with regard to Cambridge Analytica’s access to the private data on 87 million people. Cambridge Analytica is a UK based organization that was at the center of President Donald Trump's campaign. According to the accusations leveled against Facebook, the UK based company was able to have access to the profiles of more than 87 million users on the social site without their consent or awareness. Many users are still confused as to how they are affected and the implications of the data scandal. This has also led to the formulation of a new data law by the European Union's General Data Protection Law which is aimed at protecting the data of the public and the scrutiny of other public technology companies such a Facebook. Many celebrities are now leaving Facebook by deleting their public accounts since #DeleteFacebook has become a trend. This paper espouses the scandal in detail, what the problem means to the company and its stakeholders and also the broader implications of the situation to these stakeholders.
Defining the Situation
Facebook Cambridge Analytica scandal has been the recent big thing in the news. The scandal entails the inappropriate collection of user personally identifiable information of a large number of Facebook users by Cambridge Analytica since 2014 (Spangler, 2018). It is reported that Cambridge Analytica used the information to influence voter opinion in favor of some politicians. The information that was availed to the companies showed the locations of the people, their public profiles, likes, birthdays and important events. These details were then used to create psychological profiles for each subject, which would be pivotal in creating the most persuasive advert for the subjects with regard to political events. Facebook is currently being panned for violation of ethical information standards and also for violation of the right to privacy for most of its users.
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What it means for the company and its stake holders
This scandal acts as a warning to many of the users of the social media site. It is not only the violation of privacy but also the greater risks that such information leaks expose the public too. Technological revolutions have been known to benefit the smaller minority who are the major stakeholders often to the detriment of the larger majority who are the users. In the underlying scenes of the Cambridge Analytica scandal, there is a hot debate on how technology giants collect and package user data and use it to make multi-billion profits. If voter information can be influenced and compromised, what is to be said about the economic future of technology users? Personal data was used to design custom adverts to influence election polls. Therefore, the same data can be used to influence other economic decisions that are made by individuals (Ball, 2018).
Facebook investors have panicked and sold the stock because the scandal has drawn negative publicity to the company and also intense scrutiny from the lawmakers and regulators worldwide. Many companies that have been using Facebook as a marketing platform have their data at risk. This is especially because the extent to which the data was leaked is not known and it has also been difficult to track down the affected users.
What are the broader implications of the situation for the various stakeholders of the organization?
This scandal has without doubt broad implications for Facebook as a company as well as other technological giants. There has been the development of a new law aimed at the protection of the privacy and data of the public. The European Union has expressed its commitment to assuring the public that they are in control of their own privacy and that no one is collecting their data. The new law states that technology companies shall have to protect the data of consumers and also all companies European or not are forced to remove data that they have on EU citizens on request (Browne, 2018). There shall be severe penalties for failure to comply.
The incident also means that it shall be harder for companies and researchers to collect information from the public (Solon, 2018). Most of the people in the data scandal knew that the information they were handing over was for science. It could be that after the scandal individuals will be less willing to participate in research.
References
Ball, J. (2018). The Facebook scandal isn’t just about privacy. Your economic future is on the line. The Guardian. Retrieved from: https://www.theguardian.com/commentisfree/2018/mar/23/facebook-scandal-privacy-data-equality-wealth
Browne, R. (2018). 'No doubt' other big tech firms could have similar data issues to Facebook, top EU chief warns. CNBC News. Retrieved from: https://www.cnbc.com/2018/04/13/top-eu-chief-on-facebook-scandal-i-have-no-doubt-that-other-tech-firms-could-have-data-issues.html
Solon, O. (2018). Data scandal is huge blow for Facebook – and efforts to study its impact on society. The Guardian. Retrieved from: https://www.theguardian.com/news/2018/mar/18/data-scandal-is-huge-blow-for-facebook-and-efforts-to-study-its-impact-on-society
Spangler, T. (2018). Facebook Under Fire: How Privacy Crisis Could Change Big Data Forever. Variety. Retrieved from: http://variety.com/2018/digital/features/facebook-privacy-crisis-big-data-mark-zuckerberg-1202741394/
