All you need to know about the Facebook controversy that erased S$64.6 billion from the company’s market value.

5 min read

Facebook’s mission is to give people the power to build community and bring the world closer together. Facebook is the 21st century way of connecting and staying connected with the people around you.

So what actually happened?

Facebook has come under fire after reports emerged that political data analytics company, Cambridge Analytica, had access to the data of over 50 million users of Facebook’s network without their permission.  Apparently, Cambridge Analytica got the data from the creator of a quiz, a Cambridge University professor named Dr. Aleksandr Kogan. The quiz was taken by 270,000 Facebook users and the resulting data passed by the quiz creator was a breach of Facebook policy.

Facebook actually knew about the data leak back in 2015, however, it was not disclosed to the public only after last week. This angered the public since Cambridge Analytica was able to exploit Facebook’s default privacy settings for profit andpolitical gain. Cambridge Analytica was the company which served as Donald Trump’s data operations team during the 2016 election and has been accused of improperly obtaining data from Dr. Aleksandr Kogan and improperly using it to harvest information about more than 50 million user profiles without getting any permission.

Whistleblower Christopher Wylie, who was the one that helped to set up Cambridge Analytica and work with an academic at Cambridge University to obtain the data said that the system could profile individual voters to target them with personalized political advertisements. The more than 50 million profiles represented about a third of active North American Facebook users, which is nearly a quarter of potential U.S. voters at that time, the Observer mentioned.

Wylie also mentioned that Facebook was exploited to harvest millions of people’s profiles and models were built to exploit what they knew about them and to target their inner demons. This is one of the tech giant’s biggest ever data breaches, with powerful software program being built to predict and influence choices at the ballot box.

However, a spokesman from Cambridge Analytica said that Cambridge Analytica realised that the data obtained was not in line with Facebook’s terms of service and was subsequently deleted. They have provided a signed statement to confirm that all Facebook data and their derivatives had been deleted and no data from GSR was used by Cambridge Analytica as part of the services it provided to Donal Trump 2016 presidential campaign.


Photo Credit: NEWSMOBILE


How did Cambridge Analytica actually get the data of 50 million users?

Facebook offers a variety of technology tools for its users and software developers, and one of which is the Facebook Login. Facebook Login lets people log in to a website or an app simply by using their current Facebook account instead of creating a brand new credential. People loved and used this function due to the convenience it brings. With one or two taps, it eliminates the need to remember a bunch of unique username and password combinations or create a whole new credential.

However, when people use the Facebook Login function, they grant the app developers access to a range of information from their Facebook profile. The range of information can consist of things like name, location, email or friends list.  Dr. Aleksandr Kogan created “thisisyourdigitallife” app that utilised the Facebook Login feature. 270,000 people actually used the Facebook Login to create the accounts which gave Dr.Aleksandr Kogan the access to their personal profile data.

Back in 2015, developers were allowed to collect some information on the friend networks of people who used Facebook Login.  With a single user agreement to hand over their data, developers could have access to some data about their friends. However, Facebook updated it in 2015 and that is no longer possible, at least not at the same level of detail.

Dr. Aleksandr Kogan was able to get access to people’s locations and interests and more personal stuff like photos, status updates, and check-ins.  According to The Times, the data contained enough information, including places of residence, that the company could use it to match users to other records and build psychographic profiles.


Did Facebook really mess up this time?

According to Facebook, Dr. Aleksandr Kogan lied to them and violated its term of service by passing on data without any permission from an app that was using the Facebook login feature. The app would also not be permitted to access detailed data on a user’s friends under its current policies.

Alex Stamos, Facebook’s chief security officer, tweeted that there was no breaking of the system, bypassing of any technical controls or using of a flaw in Facebook’s software to gather more data than allowed. However, there was a misuse of the data Dr. Aleksandr Kogan gathered but it does not make up for a breach.


So is Facebook in the wrong for giving too much trust to the developers who use its software feature? The answer leans toward a yes with Facebook experiencing a steep drop in its share price.

Facebook’s market cap is currently at US$488.5 billion after the decline wiped out around US$49 billion (S$64.6 billion) of the company’s market value since last Friday’s closing price. Although shares have recovered from a steeper drop earlier Tuesday,  the situation is still not looking very good.

With concerns about new government regulations, fellow social media platform giant, Twitter, was also dragged down by Facebook’s woes. Twitter’s share price tumbled 10.4% on Tuesday mainly also due to the added concerns over legal threats from the Israeli government which claims that Twitter hasn’t done enough to remove threats of violence against it. Snap Inc also faced a 2.6% drop in their share price with the fears over broader regulation of social networks.


What has Facebook done so far?

On Facebook News page, one can see only two updates since the controversy appeared. With its first update mentioning the suspension of the accounts of SCL and Cambridge Analytica and the second update mentioning the conducting of a digital forensic investigation of SCL and Cambridge Analytica.

Facebook also held a meeting with the employees to answer their queries around the latest Facebook controversy.  Both Mark Zuckerberg and Sheryl Sandberg, the two popular faces of Facebook, were absent from the meeting and it was Facebook attorney, Paul Grewal, who addressed the meeting with the employees.

Mark Zuckerberg has said nothing on the matter but is working around the clock with Sheryl Sandberg and the team. According to a Facebook spokesperson,  The Daily Beast was told that Zuckerberg and Sandberg were working around the clock to get all the facts in order to take the correct action moving forward.  “Tick-tock, Tick-tock.”The clock is ticking. Let’s see how Facebook will solve this controversy and end this unhappiness.


Photo Credit: Variety


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