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Facebook’s 5 Billion Dollar Penalty Over Not Protecting User’s Data Privacy
Mark Zuckerberg was a Harvard college student who had an interest within computer programming. He is the founder of Facebook Inc. Facebook is a social networking service that was initially designed for the use of Harvard students but extended into more universities throughout the United States and Canada, corporations, and eventually extended out for the use of everyone over the age of 13 years old. Prior to the invention of Facebook, Mark created numerous of social networking services such as Facemash and Coursematch that has been widely used throughout the campus. Today, the FTC (Federal Trade Commission) is imposing a $5 billion penalty on Mark Zuckerberg and is forcing him to implement new privacy restrictions in order to refrain the company from going through another data breach.
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Since the release of Facebook, privacy issues within the company have become an issue. Related issues include, new users were asked to insert their email passwords when signing up, importing contacts without permission, and so forth. Zuckerberg intended to “leverage Facebook user data to fight rivals and help friends”. Meaning, the social networking service breached its’ user’s data to give to companies they have partnered with and deny user-data access to its’ rivals. Leveraging user data has become a type of currency for the social media platform, “the company was prepared to trade away user data when it perceived there to be a commercial advantage” (Zak Dofferman, Forbes). While intentionally leveraging user data, “Facebook was formulating a strategy to publicly frame these moves as a way of protecting user privacy” (Zak Dofferman, Forbes). Mark Zuckerberg knew his actions were not responsible and lawfully incorrect. His plan was to generate more revenue at the expense of others privacy. He has denied his allegations time after time. However, he has come to the realization that he was caught and needed to come to an agreement with the government so he will no longer be criminally liable for the actions that the company has taken. Facebook has violated its’ users privacy and has dismantled the trust they once had with the social networking platform.
“The record $5 billion settlement established an independent privacy committee as a check against Zuckerberg’s power and required the 35-year-old CEO to personally certify that Facebook is in compliance with FTC (Federal Trade Commission) guidelines. Zuckerberg and other Facebook officials could face civil penalties, or even criminal charges, if they make false claims about the company’s compliance” (Thomas Barrabi, FOXBusiness). The FTC first got involved with Mark Zuckerberg when the Cambridge Analytica incident occurred. A British data firm gained access to sensitive information of approximately 87 million users. The issue with that is, whether or not “Facebook violated an agreement it reached with the Federal Trade Commission in 2011 to safeguard the privacy of its users” (Jessica Guynn, USA Today).
It is in Mark Zuckerberg’s best interest to comply with the government, Federal Trade Commission and Department of Justice, with their terms and conditions about Facebook’s privacy guidelines in order to not be charged criminally. Mark Zuckerberg must remain out of the spotlight that highlights any negativity within Facebook in order for the social networking service to succeed. When individuals hear that there is a possibility or a potential for their private information to breached and sold to companies without permission, the less likely it is for people to continue their use of the service and will relocate to another networking platform. This is an international-based liability Facebook has created, and they have decided to take the necessary steps to settle the dispute that has arose. This would be considered a high-level issue that requires Zuckerberg’s goal to be to get the United States government off wanting to penalize him any further. He should pay the 5 billion dollars he was assigned along with complying with the newly added privacy regulations.
Due to the fact that Facebook has now agreed to conform to considerable oversight of data collection practices, their overall business strategy/practices will undergo several changes. The first adjustment that Facebook will be required to endure will be to “complete a more rigorous privacy review of new products and services before launching them” (The Federal Trade Commission). Facebook will now have to begin documenting all of their decisions, as well as their attempts to expect possible dangers involving privacy. In doing this, the company would assist the Federal Trade Commission in determining whether or not Facebook fully considered the consequences of their data gathering procedures on their users. By performing a SWOT analysis on Facebook, we determined that the biggest weakness/threat facing the company is still privacy issues. One way Facebook can attempt to anticipate these possible dangers involving privacy is to consider using the services of a corporate threat intelligence program, or to create an in-house program. Incorporating a corporate threat intelligence program would involve having staff and other resources that are devoted to thorough analysis and examination of data in efforts to prevent the types of invasions, catastrophes and occurrences that can lose the company an enormous amount of money, jeopardize the workforce, and harm its reputation. Leaders utilizing threat intelligence will be able to “identify challenges before they negatively impact operations, reduce the risk of getting caught off guard, and allowing the organization to take the steps necessary to prepare in advance for adverse events” (Dov Gardin, Lootok). Pursuing this idea is absolutely necessary due to the tremendous growth of extreme, multidimensional threats that are surrounding large businesses today, especially Facebook. The threat intelligence program would not only combat the current threats that are facing Facebook, but would also severely minimize the risk of any privacy issues in the future.
Furthermore, Facebook will now need to be more involved in enforcing the provisions on third-party application developers by examining their contributions and being certain that they obey Facebooks rules and guidelines. Every three months, chief executive Mark Zuckerberg, along with the rest of Facebooks top decision makers, will be required to evaluate the business’s privacy defense systems and approve them. Their continual reports will be presented to the “committee of independent members of Facebook’s board of directors, which will take on a more expansive role ensuring the tech giant properly handled users’ data” (Tony Romm, Washington Post). In today’s society, “the personal information of consumers is the new oil of the digital world. Everything runs on data. But while the businesses that collect and process consumer data have become increasingly valuable and powerful, recent events prove that even the world’s biggest brands are vulnerable when they violate their customers’ trust” (Angela Carmichael, Financial Post). For Facebook, when they are transferring private consumer data to a third party for any particular reason, they are the ones responsible for making sure that information is safe and in the right hands. If Facebook fully trusts in their third-party partners/vendors, they still need to incorporate the “trust and verify” technique. Even if things were to go wrong and it doesn’t end up being Facebooks fault, their consumers will ignore the other company that was involved and focus on the fact that they had an association with Facebook, and that they trusted in them. It will always be tempting when you are in a merciless business environment and a third party/vendor presents a solution to your company that will enhance the customer experience, supply advanced insight, and generate more revenue while cutting costs for your business. However, performing an audit on their company, doing an in-depth background check on the firm, and finding genuine referrals is always going to be necessary before doing business with them. It is important for Facebook to always remember that protecting their customers and their brand is essential to building on their success.
The settlement with the Federal Trade Commission can also possibly demand Facebook to encounter more meticulous, uniform evaluations by an “independent, third-party watchdog that must be approved by the FTC” (Tony Romm, Washington Post). If the business were to bear any issues with privacy in the future, they would need to announce it to the new agency in a timely manner. By using scenario planning, we found that in the event that Facebook were to have another data breach, it is important that they immediately cite when the breach took place, explain what information was compromised and offer solutions as to what those involved can do in order to protect themselves from any further damage. Although they would still receive backlash from the data breach, providing those affected with all of this information would help combat the conflict, keep Facebooks integrity, and save its reputation. The privacy of consumers sensitive and private data should be of most importance to Facebook, and knowing how to correctly handle an incident that involves the exposure of confidential information of their users is crucial.
Collectively, the increased federal supervision will result in a significant reassessment of Facebook’s viewpoint on privacy. Also, it will allow the Federal Trade Commission access into the massive tech company’s business decisions. In order for Facebook to protect itself from now on, they will need to constantly adapt to new threats, continue to keep their systems up to date, and actively review their technology. Having a superior response to threats comes with advanced technology and high-quality training. Persistence within a company includes three important components: technology, process, and people. “If any of these elements becomes a weak link, the security system as a whole will falter. Attackers are persistent; businesses need to be, too” (Bert Rankin, Lastline).
Due to data breaches and governmental parties taking a deeper look into internet privacy, administrative pressures on web businesses are at an unsurpassed high. As a result of the previous discussions, Facebook is most likely the organization under the most investigation. With Facebook and other tech giants coming into this new privacy era with the idea of reconstructing its complete foundation to best suit the users data. It’s easy to start observing at how these new policies could be beneficial not only for the users but for the company as well. We have to look intrinsically at possible strategic alternatives this company can execute. While Facebook constantly stays on top as one of the main players in the market, a SWOT analysis features issues that the organization must deliver to proceed in its worldwide market position. The company must alter its strategies by using their strengths to take advantage of opportunities and minimize threats, as well as improving weaknesses by taking advantage of opportunities to avoid threats.
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The first possible strategic alternative could be to hire more employees. “The company employed a mere 35,587 employees, a ratio of roughly one employee for every 65,000 users. How can a company so small effectively govern and protect such a large digital environment? The answer is it cannot” (Andrew Burt, Harvard Business Review). Facebook is constantly growing and pursuing this idea can benefit in many ways. With more employees monitoring, more users will feel secure and continue their use of the service. The company needs to bring forward a qualified first-class team that continuously detects out issues across their social network, in particular searching for viruses and scams. If Facebook expresses to users that they are going to crack down on security and most importantly have a team in place to minimize future privacy breaches, it could importantly improve user trust. Finding and hiring good employees can be challenging, time consuming and most importantly costly. This could potentially hurt the company in revenue.
Second, Facebook needs to forbid the sharing of data with third-party apps on its program. “Today, Facebook automatically shares a person’s name, profile image, cover picture, gender, networks, email and Facebook ID with all third-party apps, without any review process.” (Salah Ahmed, Financial Times). Many individuals have protested against this policy, stating the transferring of personal details aren’t helping users at all. These items of information are needless for many apps and it’d be adequate to share solely the Facebook ID and maybe the email with them. These restrictions can greatly cut back the danger of abuse. They also shouldn’t worry about app developers leaving its platform, because app developers are drawn to Facebook for its huge user base. The data that Facebook shares with third parties could possibly not be handled responsibly, if the company were actually concerned with their privacy issues, they would do something about it. With these changes, there shouldn’t be too much costs associated with this strategic alternative as they will just need to create a reviewing process for the third-party apps.
Lastly, Facebook should instantly stop sharing information regarding political and religious preferences with advertisers. This will make it tougher for mischievous advertisers to focus on people that are more vulnerable to fake news and information. Facebook can also limit targeted ads and give users more control over data. Advertisers utilize users “data to show specific ads it thinks you’re likely to enjoy or click on.” (Kurt Wagner, Vox). This selected advertising is huge for Facebook, and they have made billions off of it. The costs of Facebook stopping the sharing of information to advertisers could likely lower their revenue. If the company is afraid of losing money this way, they can offer a subscription or fee option in exchange for no ads. This way users can feel safer and gain trust back into their business which could potentially gain users in the future.
All of the strategic alternatives I have previously mentioned would merely be the start. Ultimately, Facebook has to create drastic changes in order for users to gain trust again on Facebook. “Over the long term, Facebook’s business model must evolve to center around trust, which means making user privacy and data security as important as monetization.” (Andrew Burt, Harvard Business Review).
The course of action that they have taken so far is a great start. By redesigning their app and website it will give users the sense that things are changing and that Facebooks intends to keep the promise that it made to its users. A new look alone will not be the thing that drags them out of the hole they have dug themselves into. Advise that we would give the company would entail giving users the ability to control the data that Facebook is able to see. For example, if I wanted to keep my likes and comments private, Facebook and third-party apps that use Facebook’s data would need my consent to access them. Implementing this idea won’t be easy and it will probably make data companies use other sources, but it will be done with the users’ privacy in mind. As of now people can see why they’re seeing certain ads and can opt out of seeing them, “But while both the dashboard and the dropdown will rid you of ads you don’t like, neither actually lets users opt out completely of any of Facebook’s four tracking methods” (Washington post).
In conclusion, Facebook must keep its’ user data as their number one priority, especially after their latest breach. In the past they have said that they would change the way they manage our data, but they haven’t fully delivered. The easiest solution for the general public will ultimately be to abandon the app completely. If Facebook wants to keep being relevant and avoid losing its popularity, then they will definitely need to make drastic changes to the way they currently handle people’s information. Implementing the ideas that we have mentioned will help Facebook from becoming the next MySpace. It’s not too late for them to turn their ship around and save them from the disaster that lies ahead of them. If they continue down the path that they’re on, the Facebook we know now will probably come to an end by the end of the next decade. With all of the social media networks available today switching cost are low for people looking to leave Facebook.
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