Mark Zuckerberg began 2018 vowing to “fix Facebook”. Three months in, and after one of the worst weeks in the company’s history with $60bn wiped off its market value, that job is more urgent than ever.
News that Cambridge Analytica (CA), a firm linked to President Donald Trump’s 2016 campaign, got data on 50m Facebook users in dubious, possibly illegal, ways has lit a firestorm. Mr Zuckerberg took five days to reply and, when he did, he conceded that Facebook had let its users down in the past but seemed not to have grasped that its business faces a wider crisis of confidence. After months of talk about propaganda and fake news, politicians in Europe and, increasingly, America see Facebook as out of control and in denial. Congress wants him to testify. Expect a roasting.
The severe damage to Facebook
Cambridge Analytica recognised that Facebook’s power lay in its data, its scale and its ability to target individuals with precision. Christopher Wylie, a whistleblower who worked for the UK-based company, told The Observer that it broke Facebook’s rules to obtain data on 50m users. It then used that data to compile psychographic profiles that classify people by personality type, so it could target them with the political messages most likely to hit home.
Facebook was built on the idea that “sharing” was natural to a new generation. Mr Zuckerberg said in 2010 that “social norms” around privacy were changing. When the social network began to try to generate revenue, it realized that user data were its treasure. Mr Zuckerberg told Recode, the technology news website, this week that he may have been “too idealistic” in opening Facebook up to developers. “They simply allowed an advertising based system to get out of control,” says David Kirkpatrick, author of The Facebook Effect. “You could use the word greed if you wanted to be uncharitable. They clearly prioritized growing profits over cautionary controls.”
Donald Trump can not be taken out
To be clear, Facebook knew what Cambridge Analytica did, but only (partly) acted on it when the press made it public knowledge. It was more than two years ago — December 2015 — when The Guardian published its first report about Cambridge Analytica using Facebook data to target US voters. Facebook didn’t suspend them until last Friday. Cambridge Analytica maintained its access for years, while one of its chief officers worked at Facebook — and while Facebook employees were embedded in the Trump campaign’s digital media operation.
Keep in mind that Trump won by well-placed Electoral College votes: 77,744 to be precise. Before Cambridge Analytica came along, Trump had “no unifying data, digital and tech strategy,” according to leaks made public today by The Guardian. With its Facebook data, they ran Facebook ads disguised as news stories, linked to fake news sites, and targeted Facebook users they deemed especially susceptible. Then Cambridge Analytica tracked those Facebook users across the internet and re-targeted them. Russia’s trolls did the rest, providing all the confirmation and social proof needed.
Facebook seems to think it only needs to tweak its approach. In fact it, and other firms that hover up consumer data, should assume that their entire business model is at risk. As users become better informed, the alchemy of taking their data without paying and manipulating them for profit may die. Firms may need to compensate people for their data or let them pay to use platforms ad-free. Profits won’t come as easily, but the alternative is stark. If Facebook ends up as a regulated utility with its returns on capital capped, its earnings may drop by 80%. How would you like that, Mr Zuckerberg?