What’s Next in the Facebook Flap?
Even with Facebook’s stock price in freefall (the stock price fell 20% in just over two weeks), no one seriously expects that the Cambridge Analytica fiasco will bring down the social media powerhouse. In fact, the lackluster response to the recent #DeleteFacebook campaign on Twitter may demonstrate just how solid the ground is underneath the Facebook kingdom. Facebook reigns supreme.
On the other hand, there has been a groundswell of support for some kind of regulation to protect user privacy and rein in a bit of the king’s unwieldy power. Tech leader Elon Musk may only have offered ineloquent criticism when he said, “just don’t like Facebook. Gives me the willies,” but others are looking for actual solutions.
Apple’s Tim Cook weighed in on the mounting debate, clearly stating that it’s time for some “well-crafted regulation.” Cook seemed to echo Musk’s sentiment when he said that “the ability of anyone to know what you’ve been browsing about for years, who your contacts are, who their contacts are, things you like and dislike and every intimate detail of your life — from my own point of view it shouldn’t exist.” Even more Orwellian, Cook borrowed from an old quote with relevant resonance when he said, “when an online service is free, you’re not the customer — you’re the product.”
When an Online Service is Free, You’re Not the Customer
— You’re the Product.
And from an advertiser’s point-of-view, that’s kind of the whole point. That crazy deep trove of info on a target audience that Facebook supplies is more valuable than gold. Investors may leave, users may even begin to drip off, but advertisers aren’t about to abandon the site. It wouldn’t make financial sense.
Legislators and Lobbyists
Even before Cambridge Analytica, Facebook had suffered some serious salvos. Russian efforts to scale the Facebook fortress and influence the 2016 election were both easy and indefensible. But Facebook tried. Its VP of Advertising Rob Goldman took to Twitter to defend the crown, but his efforts missed the mark. Even when CEO Mark Zuckerberg announced back in September that Facebook was ready to be more transparent, it was seen by many detractors as too-little-too-late. Congress lauded the effort but many agreed that self-regulation wouldn’t fly for long. And while Facebook promised a more upfront approach with one breath, it was steadily spending heavily on lobbyists to stake its royal claim with its next. Last year, the company spent more on federal lobbying than in any other year since its existence.
But will money alone buy it freedom from regulation?
U.S. legislators are already rattling sabers. In committee hearings late last year, Republicans and Democrats, alike, went looking for answers. And while Republican James Lankford said he was hoping for a solution where Congress would not “have to engage in legislatively,” Democrat Dianne Feinstein was not so gentle: “You are going to have to do something about this or else we will,” she said. But perhaps it was Republican Senator John Kennedy who summarized feelings all around when he said “Your power sometimes scares me.”
While U.S. legislators may offer shaky resistance to the Facebook command, European regulators have acted more swiftly. From an historical perspective, perhaps they’re more guarded against unwanted colonization, whether actual or intellectual. But the General Data Regulation privacy rules set to go into effect next month could have a profound impact on Facebook and other social media advertising platforms moving forward. In addition to giving users more control over their online information, the rules allow individuals to block their data from being harvested and sold to ad networks. There’s even a right-to-be-forgotten provision that would allow users to remove information from their digital footprint that they no longer want out there. And the rules come with hefty fines—up to 4 percent of a company’s annual global revenue or $24.8 million, whichever is higher.
But legislators and regulators aren’t the only attackers attempting a breach of the castle walls. Facebook is being hit with multiple lawsuits from public entities, shareholders, and more. Can you say class-action lawsuit?
At the end of day, Facebook is still a $400 billion company with 2.13 billion users and 5 million advertisers. There may have been a slight chink in its overall armor, but its empire remains safe, intact, well-fortified and set for the foreseeable future.