Understanding the Facebook-Cambridge Analytica Story
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Understanding the Facebook-Cambridge Analytica Story: QuickTake
By Michael Riley, Sarah Frier and Stephanie Baker | Bloomberg
Facebook Inc. is under fire following reports that the personal data of 50 million users were obtained by an analytics firm that helped elect President Donald Trump. Lawmakers and regulators in the U.S. and U.K. are now scrutinizing the social media giant, whose shares have dropped more than 9 percent since the news broke on March 17.
1. Who took what from Facebook?
During the summer of 2014, the U.K. affiliate of U.S. political consulting firm Cambridge Analytica hired a Soviet-born American researcher, Aleksandr Kogan, to gather basic profile information of Facebook users along with what they chose to “Like.” About 270,000 Facebook users, most or all of whom were paid a small amount, downloaded Kogan’s app, thisisyourdigitallife, which took the form of a personality survey. Kogan collected data not just on those users but on their Facebook friends as well, if their privacy settings allowed it -- a universe of people that reached 50 million. The app, in its terms of service, disclosed that it would collect data on users and their friends.
2. Did Kogan have Facebook’s permission?
In a general sense, yes. Since 2007, Facebook has allowed outside developers to build and offer their own applications within its space. When Kogan offered his app, Facebook also allowed developers to collect information on friends of those who chose to use their apps if their privacy settings allowed it.
3. Then what’s the issue here?
Facebook says Kogan “lied to us” by saying he was gathering the data for research purposes and violated the company’s policies by passing the data to Cambridge Analytica. (Kogan has said the app’s terms and conditions were written to allow commercial uses.) Facebook says that after it learned of the situation in 2015, it removed Kogan’s app and demanded that he “and all parties he had given data to” destroy the data. Facebook says it received assurances that the data was destroyed, though recent media reports say it wasn’t. Cambridge Analytica has maintained that it deleted all the data Kogan provided.
4. Why did Cambridge Analytica want the Facebook data?
The firm uses data to reach voters with hyper-targeted messaging, including on Facebook and other online services. The company may have wanted the data to create psychological profiles that could be used to target voters during political campaigns. The firm believed those profiles were better predictors of how voters could be swayed through targeted ads than traditional data on party registration and voting patterns. Cambridge Analytica was funded by former Renaissance Technologies co-CEO Robert Mercer, a major supporter of Trump in 2016. Trump’s campaign manager, Steve Bannon, served on the firm’s board.
5. Did Cambridge Analytica pay Kogan?
It covered his costs in creating his app -- more than $800,000 -- and allowed him to keep a copy for his own research, the New York Times reported, citing company emails and financial records.
6. Did the Facebook data help Trump win the presidency?
Whether Cambridge Analytica’s models really work is a point of contention; even some of the firm’s clients have said they saw little value in it. Cambridge Analytica has denied it used psychographic modeling techniques on the Trump campaign. But it’s not clear whether the firm used the Facebook data in other ways to better understand and target voters. Also unknown: how many of the 50 million Facebook users whose data were acquired were registered U.S. voters.
7. Did any of this violate any rules?
That remains to be seen. The U.K. has data-protection laws that ban the sale or use of personal data without consent. And in 2011, Facebook settled privacy complaints by the U.S. Federal Trade Commission by agreeing to get clear consent from users before sharing their material. The FTC is now investigating whether Facebook violated the terms of that 2011 consent decree. The company would face millions of dollars in fines if it were found to have violated that pact. Lawmakers in the U.S. and U.K. are conducting their own inquiries.
--With assistance from Laurence Arnold