How many of us woke up to the news of a 1.5% dip in the stock market today? This is primarily due to the outfall of Cambridge Analytica’s illicit use of profile data from Facebook. Of course, the illegality, as far as Facebook is concerned is for holding data that Cambridge Analytica said they had voluntarily removed from their servers years before. The current fallout to Facebook (down 7% today) is not for the potentially catastrophic end use of that data if proven to have been used in electioneering, which Cambridge Alaytica is under investigation in the UK for swinging the Brexit vote as well as in the US for helping elect Trump, who paid handsomely ($6M) to get access to their user-profile centered analyses.
Admittedly, with #deletefacebook trending up a storm on Twitter (of all places), there is a little bit of schadenfreude aimed at greedy Facebook ad executives baked into that 400 point drop in the Dow, but at its heart is an international call for better regulation of the deeply personal data that is housed and sold by Facebook and other tech giants. In this instance, the data policies that are in the limelight are two of the most problematic for Facebook: third party sharing/housing of data, and using research as a means for data acquisition. The research use of Facebook data is definitely tarnished
The market volatility and the fact that Facebook actually lost daily users last quarter in the US, some of which was attributable to data privacy concerns from their user base, highlights the need for more secure third party data use policies. These are exactly the reason why, even if you delete your profile, the data can live on (indefinitely) on the servers of third party vendors without known/feasible recourse by the Facebook users to demand the deletion of this data. And their privacy policy makes this clear, though it is a difficult read to figure that out.
Facebook’s outsized market value is based in a great part on their ability to aggregate their users’ personal data and freely sell it as desired. The European Union’s upcoming May 25th deadline to implement the General Dat Protection Regulations is likely to help push the needle towards more control of data deletion and usage by third parties in Europe, and it is exactly the specter of potentially farther reaching regulation about data usage that dragged down the market today and will ultimately lower Facebook’s value if more regulation comes about. The big question is whether Facebook and other large data acquiring companies will be able to balance their voracious profit motive and inherent need to sell our data with the ability to help protect our privacy, and/or whether heavy handed government tactics can achieve that second goal for them?