Privacy Matters: How The Facebook-Cambridge Analytica Scandal Affected Facebook’s Worth
Photo Credit: iStock.com/Artist’s Amesy
It’s always fun to share your life with your friends over social media until you realize that each and every move you’re making is kept under observation – which means no privacy at all.
Facebook – with 2.2 billion monthly active users – has encountered an abysmal fall that has affected millions across the globe.
It’s all over the news: Facebook’s privacy concerns rise all over the globe as a data of about 50 million users was accessed by a political organization, Cambridge Analytica, which is said to have aided Donald Trump to win the US presidential elections.
How It All Started?
Since Facebook swears by its privacy control and management, how did this political agency accessed the data so easily?
The data was collected via a third party survey application ‘thisisyourdigitallife’ that used the Facebook platform. It used the API to extract data from the friends’ list of the 270,000 people who participated in the survey.
The Cambridge Analytica breached Facebook’s privacy rules and stored the data despite Facebook’s request to delete it in 2015. According to Chris Wylie, the co-founder of Cambridge Analytica who left the organization in 2014, this political consultancy firm used that data to develop methods for voter influence in 2016.
Wylie also claimed that the data was used to develop virtual profiles of people by accessing their psychographic data, so they may be delivered promotional content for Trump’s selection.
In fact, 59% of the 4217 people, who participated in a recent CB Insight poll, regarded Facebook as a ‘net negative’ for the society in the coming 10 years.
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Facebook And Zuckerberg Receive Massive Fiscal Backlash
After the announcement made by the US Federal Trade Commission (FTC), the New York Trading witnessed a fall of 3.2% to $167 in the Facebook shares in New York, which was followed by a drop of 6.8% on Monday, March 19.
Although Facebook’s founder and CEO, Mark Zuckerberg admitted the company’s failure to protect people’s privacy, the company lost its market value of about $50 billion in stock shares within two days of the fiasco.
As the controversy hit the Facebook’s market shares, the CEO, who enjoys his wealth from the Facebook stock of 403 million shares, also lost 10 billion dollars amid the Facebook crisis week.
Let’s admit: the Facebook-Cambridge Analytica controversy has given a hard time to both Facebook and Zuckerberg. After the Cambridge Analytica news spread like wildfire, Zuckerberg had lost 6.06 billion dollars at the week’s start.
Due to the controversy, Zuckerberg’s net worth went down from 74.8 billion dollars to 67.3 billion dollars, according to Bloomberg. However, he ranks seventh among the richest people in the world. Zukerberg is also said to own about 70 billion dollars of Facebook shares.
Now that the controversy became an amalgam of confusion, insecurity, deceitfulness, and rage, Facebook decided to debar Cambridge Analytica for its use of 50 million user data.
This scenario demanded some action from the Cambridge Analytica, which refuted the claim of having used the data for Trump presidential campaign. And hence, suspended its CEO Alexander Nix.
However, Zuckerberg came forward and addressed the issue by publishing statements on Facebook and welcomed interviews regarding the incident and its prevention.
What Is Being Done About The Controversy And The Privacy Rights?
From what it seems, Facebook is surrounded by a never-ending dilemma of Russian fake profiles and rumors, to which the Cambridge Analytica has added more burden. It’s also been noticed that the investors are also selling shares since the company went down by 8% since Friday.
Now that the scandal has surged to the public eye, the FTC is investigating Facebook’s violation of 2011 consent order regarding user data and its transfer to the Cambridge Analytica without user knowledge.
If the FTC finds Facebook’s lack of adherence to the consent decree, Facebook can be charged with thousands of dollars per day for violation.
Senators Amy Klobuchar and Jon Kennedy in the US Congress have requested a law proceeding to investigate Facebook and Cambridge Analytica’s links. The Republican leaders of the Senate Commerce Committee also have written a letter to the Facebook’s CEO, questioning the data collection.
Moreover, a British Parliament Committee summoned Mark Zuckerberg, via a written letter, to delineate the link between Facebook and Cambridge Analytica.
As for Cambridge Analytica, it stated that it would support full and independent investigation of the incident.
As the stocks for Facebook fell, its controversy continues to attract the attention of the lawmakers. There’s an outcry for the regulation of a social media site that has exceeded its boundaries.
However, many analysts report that despite the fall in Facebook shares in the market, 90% of the brokers bet on ‘buying’ Facebook shares.
The reason? Several analysts believe that Facebook can overcome the challenge as its current controversy might not impact its long-term prospects. Moreover, Facebook has gathered a massive data of 2 billion users worldwide, which makes this social network giant excel the competition.
Whether the world has witnessed a dark side of Facebook or is it Facebook turning over a new leaf? Will people’s calls and text messages be safe from the political reach? Does Facebook deserve a second chance or not?
Now’s your turn to decide!