Over the past few weeks, Facebook has been under intense scrutiny for allegedly weak privacy and data protection measures. But has the company’s behaviour and actions been motivated by greed, naiveté, or a combination of the two?
If you have been following the Facebook and Cambridge Analytica saga, you would have realised that to some degree, the focus has shifted considerably from Cambridge Analytica to Facebook. The situation continues to unfold, and as was stated in a recent article, it is likely to get worse before it gets better, as governments worldwide have been questioning whether Facebook has had too much autonomy, and whether more controls should be introduced.
The furore has caused me to revisit Facebook’s attitude and posture over the years, along with that of other tech businesses. I am thus of the view that the seeds of the current situation were sown years ago, when Facebook was a fledging operation trying to figure out how to leverage its product into the powerhouse business it has become.
The struggle to be profitable
Although there were social networks before Facebook, and social networks after Facebook, none of them are as popular as Facebook, with over 2.1 billion monthly active users at the end of 2017 (Source: Facebook), and still growing! However, although the company has been a highly popular, for years it suffered with not being profitable. More specifically, it was not able to capitalize on its popularity – with both individuals and businesses – to generate revenue commensurate with the value it provided.
Having said this, it could be argued that Facebook was the poster child for a popular business model in the tech space: give away your product for free in the first instance, in order to build your customer base, and thereafter figure out how to leverage it become profitable. However, Facebook struggled with the second part of the formula, but have since figured out how to use its platform, along with all of the data it has on its customers to attract significant advertising revenue.
The pressure of public shareholders
However, it could also be argued that although becoming a publicly traded company on the New York Stock Exchange, boosted Facebook’s bottom-line and validated its blood sweat and tears to get to that point, it also resulted in considerable pressure for increased growth and profits year-on-year. Hence, as was noted in our earlier article on the Cambridge Analytica–Facebook debacle, within Facebook there had been an uneasy tension between privacy and security concerns, and the imperative for increased revenue.
Although many tech businesses have as their ultimate goal floating shares on a stock exchange, in doing so, the business owners are not answerable just to themselves. Decisions that might be good for the business but could affect revenues, and consequently profits, tend to be avoided to keep shareholders happy. Consequently, and to some degree, the business owners no longer have full control of their businesses, as they are now answerable to others on how their businesses are run.
Things that get lost along the way
In light of the above, it should thus not come as a surprise when in chasing down the money Facebook was not as vigilant as it should have been in managing some aspects of its operations. Having said this, and in the company’s defence, it must be emphasised that there is really no precedent for the issues and challenges tech firms, like Facebook, must address. the Internet and social networks are still relatively new innovations that are still evolving. The value of data and its application is still being explored and harnessed. Matters relating to cybercrime, unauthorised access to and use of data (data theft), etc., are constantly changing, and becoming more sophisticated and insidious. Hence, today’s tech companies must learn as they go along.
However, Facebook is in hot water because, first, when the unauthorised access and use of customer data by Cambridge Analytica was discovered in 2015, that information was not made public. Second, remedies that company indicated it made subsequently were also not communicated. Third, Facebook is now admitting – perhaps based on the fallout that has ensued – that the remedies it implemented were inadequate and that company will now be rolling out more comprehensive changes (which might take a few years to implement).
It is thus no wonder that people and countries worldwide are even more uneasy about the amount of independence Facebook has had, vis-à-vis the power it wields as the world largest social network, which has access to and controls highly personal data of its 2 billion-plus users. Further, there is additional concern about the extent to which the company’s actions to date have been fuelled by greed, or by naiveté, with respect to whether it appreciated the extent external forces would seek to exploit its platform for their own gains.
Summary
Although Facebook has been the focus of this article, it should be considered just an example demonstrating the conflicting postures that many successful tech businesses (even Caribbean tech businesses) must grapple with. However, as a leader in its field, this whole experience and the consequences therein are likely to have a ripple effect not only throughout the global industry, but also associated sectors and industries that depend on social networks, either directly or indirectly, for their continued success.
Image credit: trainer24 (Pixabay)
An important caveat to all this is buried in the text of the views expressed. And that is: there is no precedent for the issues and the fallout tech firms are facing and attempting to address. The online-based social networks are a new phenomenon, developing in uncharted territories .
As such, new situations and scenarios will certainly give rise to new never-experienced-before challenges. Under the circumstances, the best that tech firms, like Facebook, should always equip themselves with, is very good communication to, firstly, their wider users and, secondly, to authorities.
Personally, I have been quite impressed with Zuckerberg’s at the on going congressional inquisition. He has so far emerged unscathed, parrying a slew of question, while upholding the industry “unwritten rule” of supremacy of user privacy over government regulations for internet firms. But as I have pointed, this would have been pre-empted ( or at least mitigated ) if good communication had been given earlier.