Are We Witnessing the Fall of Facebook?

March 26, 2018 - 10 minutes read

Fake news, data privacy issues, mental health concerns… Facebook has seen its fair share of controversies and unfavorable headlines in recent months. But it hasn’t faced anything compared to what it’s up against now.

Will the latest scandal about stolen personal information be the last straw for the behemoth social network?

Keep Your Friends Close and Your Data Closer

By now, you’ve probably heard. It’s been virtually impossible to ignore the media frenzy over the past couple of weeks. Cambridge Analytica is a political consulting firm credited with playing an integral role in President Donald Trump’s electoral victory. It has also recently been credited with stealing the personal information of at least 50 million Americans through Facebook.

In 2014, Cambridge Analytica hired a researcher named Aleksandr Kogan to develop an app called thisisyourdigitallife. The purpose of the app was to acquire profile information from users who chose to download it and take a personality survey. Roughly 270,000 Facebook users participated. But Kogan’s app didn’t stop there; it also collected data on Facebook friends of these users. This caused the real number of profiles gleaned for data to balloon to 50 million.

In all fairness, the app’s terms of service did say that it would be collecting data on users as well as their friends. And Facebook notoriously lets developers acquire information of app participants’ friends if their privacy settings enable it. The real problem began to take shape back in 2015. Facebook learned that Kogan was supplying this data to Cambridge Analytica, removed his app, and demanded that he and all parties in possession of the data destroy it immediately.

While both Cambridge Analytica and Kogan claim to have done just that, there is strong evidence that the London-based data analytics company still has it stored away. Facebook and the UK’s Information Commissioner’s Office are both investigating whether this is true. Cambridge Analytica was funded by Robert Mercer, the former co-CEO of hedge fund Renaissance Technologies and a major Trump supporter. Steve Bannon, Trump’s campaign manager, was also part of the company’s board. It is believed that the firm used the acquired data to predict how voters could be swayed by targeted ads.


Seeing the calm before the storm, Facebook tried to beat the press to the punchline by announcing that it would be suspending Cambridge Analytica and putting a stop to this sort of data sharing. Unfortunately for the social media giant, its network of approximately 2 billion users wasn’t so quick to forgive and forget this time.

The hashtag phrase “#DeleteFacebook” took the Internet by storm so fast that it would make any social media marketer jealous. On Wednesday, March 21st, it was retweeted more than 10,000 times in a two-hour period according to analytics service ExportTweet. Brian Acton, who sold messaging app WhatsApp to Facebook in 2014 for $19 billion, tweeted the message, “It is time,” followed by the now-famous hashtag. Elon Musk deleted the Facebook pages for both of his companies.

Of course, outrage wasn’t only limited to social media users and tech magnates. Since the 2016 presidential election, the morale at Facebook has been iffy, to say the least. Some employees even described working on the social platform as “demoralizing.” A noticeable number of workers have requested to be transferred to other divisions of the company, like Instagram and WhatsApp.

Both U.S. and British politicians have called on CEO Mark Zuckerberg for an explanation. Regulators in New York and Massachusetts have opened investigations into both Facebook and Cambridge Analytica. All of this pressure has manifested in a company stock plummet of almost ten percent in the last week, equivalent to roughly $50 billion in market value.

A Troubled Past With Privacy

This isn’t the first problem that Facebook has had with privacy. It’s not even the twentieth. In its founding year of 2004, Zuckerberg had some choice words to describe the user base: “They ‘trust me.’ Dumb ****s.” If there’s one quote he’s probably regretting right now, it’s this one. But you also can’t blame him for thinking that this whole situation would blow over.

After past grievances with Facebook’s data practices, users have actually returned to the service in greater numbers, every time. Even after they made user posts public by default in 2009. And even after the company admitted to trying to manipulate user emotions because of an internal psychological test in 2014. In 2008, the term ‘Zuckerberg’s Law’ was even coined: According to Zuckerberg, people were willing to share twice as much information about themselves than they did the year before.

But the final straw that ended up causing this most recent controversy is Facebook’s lax regulations on third-party developers and its data. Graph API, the social media company’s interface between their platform and third parties, was deliberately open with user data to attract developers. And it worked. FarmVille, Tinder, Barack Obama’s 2012 presidential campaign are some of the biggest beneficiaries of this practice, but that just scratches the surface.

A Mistake That Can’t Be Undone

But what was originally a symbiotic relationship eventually became parasitic. Jeff Hauser of the Center for Economic and Policy Research thinks that Facebook pushed it too far: “They wanted to push as much of the conversation, ad revenue and digital activity as possible and made it extremely friendly to app developers. Now they are complaining that the developers abused them. They wanted that. They were encouraging it. They may now regret it but they knowingly unleashed the forces that have led to this lack of trust and loss of privacy.”

The company tried to dial back on the developers’ abilities to access data in April 2014 with new restrictions. But these changes just became a countdown timer for those who had access before this month. “There are all sorts of companies that are in possession of terabytes of information from before 2015,” Hauser explains.

While this recent scandal with Cambridge Analytica may be news to some, it was a long time coming to many others that were aware of Facebook’s history. Hauser says, “Facebook’s practices don’t bear up to close, informed scrutiny nearly as well as they look from the 30,000 ft view, which is how people had been viewing Facebook previously.”

Facing the Fallout

“We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you,” Mark Zuckerberg wrote in a post last Wednesday after remaining silent on what is perhaps the biggest problem that Facebook has ever faced. “I’ve been working to understand exactly what happened and how to make sure this doesn’t happen again.”

“This was a breach of trust between Kogan, Cambridge Analytica and Facebook,” he continued. “But it was also a breach of trust between Facebook and the people who share their data with us and expect us to protect it.” These statements have done little to quell the lawmakers, shareholders, and social media users waiting for an answer from the CEO.

“You need to come to Congress and testify to this under oath,” tweeted Senator Ed Markey of Massachusetts. Researchers and analysts familiar with Facebook’s data practices were quick to point out that Zuckerberg’s statement completely dodged the entire topic of data.

“He avoided the big issue, which is that for many years, Facebook was basically giving away user data like it was handing out candy,” says Jon Albright, Research Director at the Tow Center for Digital Journalism at Columbia University. “There is no question that handing out that data made Facebook the success it is as a company. This has to be recognized as part of their business model and not just a one-off problem.”

How all of this will unfold for Facebook’s long-term future remains to be seen. However, if the data is anything to go off of, things aren’t looking too good.

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