23 July 2019
A data leak scandal has prompted some observers to issue calls for deletion of Facebook accounts. Photo: Reuters
A data leak scandal has prompted some observers to issue calls for deletion of Facebook accounts. Photo: Reuters

Why Facebook will ride out the data leak scandal

Social media giant Facebook is under fire following a data leak scandal. A former contractor with Cambridge Analytica revealed recently how the data analytics firm gathered personal data of more than 50 million American Facebook users without their consent.

Cambridge Analytica had been hired to offer help on Donald Trump’s US presidential campaign in 2016. Robert Mercer, a wealthy Republican donor and a big supporter of Trump, is a major shareholder of the data company.

As the firm worked for the Trump campaign, it allegedly tapped into information on millions of Facebook users.

The privacy breach may have significant consequences. It remains unclear whether Cambridge Analytica made direct use of the secretly harvested data for Trump’s campaign. But it’s widely known that the Trump team had made good use of Facebook advertising to reach potential supporters at much lower costs.

Facebook has admitted the data leak and requested Cambridge Analytica to delete any data they extracted from Facebook without consent. The social media giant has launched an investigation into the privacy breach. However, it has already suffered some damage, as the data leak has prompted speculation that the company could come under closer regulatory scrutiny.

Facebook saw its shares plummet as much as 6.8 percent on Monday, the biggest slide in four years. More than US$36 billion was wiped out from the Internet giant’s market value.

Wylie disclosed that Cambridge Analytica purchased Facebook users data from third-party entities. The data includes detailed identity, such as name, sex, profession, their networks and social behavior.

Enough information was obtained to build psychographic profiles of the users which was then used to deliver targeted political ads.

There are various third-party programs available on Facebook. If users click on the tools and agree to the terms, they may be deemed to have given consent for use of their personal data, putting Facebook as well as the third-party institutions off the hook. However, the issue is not as simple as Facebook must be discovering now. Big corporations have a responsibility to protect data privacy.

Amid the controversy, some critics have called for deletion of Facebook accounts. If such calls find a large number of takers, Facebook may see further sell-off in its shares. However, it would be wrong to assume that the company is facing a risk of falling apart. 

One must bear in mind that social media has become an essential part of people’s lives in many parts of the world. Facebook now has over 2.2 billion users, who share a big part of their lives on the platform. That means the company is too big to fail in a way.

Nobody can give up their digital life no matter the privacy concerns. Digital life, or social media, has become something that you can’t really opt out of, whether you like it or not.

The full article appeared in the Hong Kong Economic Journal on March 21

Translation by Julie Zhu with additional reporting

[Chinese version 中文版]

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Hong Kong Economic Journal columnist

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