While Facebook initially shrugged off the Cambridge Analytica Scandal, the continuing revelations relating to it has the potential to change Big Data forever.
Ever since its founding in 2004, Facebook has relied on big data to lure more users to the platform, entice them to spend more time on it, and make more profits via user-targeted advertising.
That could soon change, though, given the fallout which the Cambridge Analytica Scandal has left in its wake. In case you don’t know about it, that scandal revolves around the leaking of data of over 50m users to a British firm, which then used the data for various purposes, including influencing elections.
In the wake of these revelations, all hell broke loose for the giant social media platform. With users angry over the breach of their privacy and investors panicked to sell their stock, Facebook has lost over $90 billion in market shares over the past one month.
Still, while they look bad on paper, these are mortal blows Facebook knows it could withstand.
There is, however, one final storm which Facebook won’t be able to get through without bruising itself: that of regulation. And if Facebook is regulated, the costs to it, in both reputation as well as financial terms, would be huge.
For instance, the Federal Trade Commission is already investigating Facebook as to whether it broke a 2011 agreement, which requires organizations to get user agreement before sharing data. If proved guilty, Facebook might have to pay up to $40,000 per violation in this regard.
Then there is the question of complying with intergovernmental privacy protection laws.
Last year, the European Union enacted a General Data Protection Regulation in its member states. Going into effect from May 25, this regulation requires companies like Facebook to obtain user consent before collecting their data.
The same regulation gives consumers the right to ask platforms like Facebook what they know about them. Worse, for Facebook, the residents of EU could also ask it to delete any photos or data it may have of them.
But what if Facebook decides to non-comply? Well, it would be expensive. The regulation has set the maximum fine for non-compliance at up to 4% of the company’s global revenue, which, in Facebook’s case, would amount to $1.6billion.
Finally, there is the ‘’small’’ matter of Congressional oversight.
Facebook’s name has been already been hauled through the mud before Congress when the question about Russian meddling in American elections arose last year.
What would make the upcoming congressional hearings – as Zuckerberg has decided to testify in front of Senate Judiciary Committee on April 10 – different is the absence of public support for Facebook.
For, when it last appeared before Congress to answer questions about Russian bots using the platform to meddle in American elections, Facebook had the implied support of U.S. President, who believed that the trail was part of a vindictive agenda to sully Mr. Trump’s presidency.
Not anymore. With Facebook handing over data of 50m users to Cambridge Analytica, everyone – Republican and Democrat – is affected. Nobody knows whether his name was on the list of 50m people, but everyone suspects that it might well be the case.
Therefore, with no public support in its tow, Facebook would be well-prepared if it expects a harsh grilling in front of the US Senate. And if Mark Zuckerberg isn’t able to satisfy the Congresspersons, a new wave of legislation targeting big data could ensue.