If you want to #DeleteFacebook or whine about Trump stealing the 2016 election, be my guest, but don’t do it on account of the Cambridge Analytica data mining scandal. This is more about overblown sensational headlines and political power grabs than anything for users or investors to be concerned about.
Ignore all the media hype and listen up; this is what really happened:
First, it was not a data breach. Cambridge Analytica obtained the data legitimately using a common Facebook developer API that allowed third-party apps access to consenting users’ friends’ data as well as their own. Facebook ended the practice in 2015, but the research firm continued to use the information on behalf of the Trump campaign.
Second, the data in question was not actually used in the general election, and it’s not at all clear that it served any real purpose in the primaries. Meanwhile the Obama campaign actually did use Facebook data from millions of unknowing users to win in 2008 and 2012 using the same developer API.
Third, no sensitive user data was obtained, nor was their non-sensitive data used for any nefarious purpose except to try to target certain users with political ads. A total of 50 million users were effected.
In contrast, the Equifax data breach involved sensitive personal information – names, social security numbers, birth dates, addresses and in some cases driver’s license and credit card numbers – of more than 143 million Americans. The Yahoo! breach hacked sensitive data from 3 billion user accounts.
For Facebook’s 2 billion users, this is a big fat nothingburger.
Don’t get me wrong; the social network has always played it sort of fast and loose with user data. What do you expect from a company whose motto is “Move fast and break things?” To be fair, Mark Zuckerberg and company have just followed the lead of their users who seem perfectly willing to share all things personal with whoever.
So why is Zuck doing the whole apology tour, saying Facebook violated users’ trust and vowing to do better? Because, he’s being hammered from all sides – the EU and Washington want their pound of flesh and the stock has slid 10% this week. If you’re a CEO, that’s what you do.
Crisis management 101: Admit you screwed up, promise to fix it, cooperate with the bureaucrats and sooner or later everyone will move on. And everyone will move on; they always do.
Some are calling this an existential threat to Facebook. Nonsense. The media firestorm is taking down other social media stocks and negatively impacting the entire tech sector. Granted, there will be market volatility and political grandstanding in the near term. There may even be some regulatory pressure. But it will all blow over. It always does.
When it comes to digital advertising, Google and Facebook are the only games in town. When it comes to social media, nobody even comes close to Facebook. And when it comes to growth, it’s hard to beat what Zuckerberg, Sandberg et al have accomplished in such a short time.
Full disclosure: I am not a Facebook investor, advertiser, frequent user or even a fan.
Image credit Mait Jüriado via Flickr