In 2014, political consulting firm Cambridge Analytica developed an app designed to create digital profiles of individuals via their information. Cambridge Analytica collected the data
In 2014, political consulting firm Cambridge Analytica developed an app designed to create digital profiles of individuals via their information. Cambridge Analytica collected the data by inviting several hundred thousand Facebook users to complete a survey for payment, assuring them the data was only for academic use. However, Facebook allowed this app not only to collect personal information from survey respondents, but also from respondents’ Facebook friends without their knowledge. In this way, Cambridge Analytica acquired data from millions of Facebook users without their consent, which it then sold to political campaigns for use in targeted advertising. This all followed a 2012 Federal Trade Commission (FTC) order holding that Facebook had to give users more control about how their data was used. For violating the order and lying to users about the privacy of their data, Facebook was ordered to pay a record-breaking $5 billion fine by the FTC. Additionally,
Facebook was ordered to comply with a 20-year plan that requires it to regularly certify with the FTC that it is following a mandated privacy program.
What effect do you think these sanctions will have on the behavior of Facebook and other firms going forward?
The $5 billion fine is unprecedented, but represents less than 10 percent of Facebook’s annual revenues. Are companies like Facebook too big for sanctions to have any meaningful effect?
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Dynamic Business Law
Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs
6th Edition
1260733971, 978-1260733976
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