Cambridge Analytica has denied wrongdoing but said the controversy weighed on its business and forced it to close its doors.
“The siege of media coverage has driven away virtually all of the company’s customers and suppliers,” the company said in its statement. “As a result, it has been determined that it is no longer viable to continue operating the business, which left Cambridge Analytica with no realistic alternative to placing the company into administration.”
In the wake of the data-mining scandal, Zuckerberg faced more than 10 hours of hearings with three committees in the Senate and the House of Representatives. The hearings stretched over two days, during which he was grilled on everything from data privacy concerns, censorship and even how the Russian government manipulated Facebook to spread propaganda during the 2016 election.
In a statement, Facebook said it’s continuing its investigation with “relevant authorities.”
“This doesn’t change our commitment and determination to understand exactly what happened and make sure it doesn’t happen again,” a company representative said. Last week, Facebook reported a nearly 50 percent jump in sales, suggesting the biggest crisis in the company’s 14-year history has yet to take a toll.
The sudden decision to close shop marks a departure from Cambridge Analytica’s strong defence of itself. Just Monday, the company tweeted that followers should “Get the Facts Behind the Facebook Story,” adding a link to cambridgefacts.com. That site attempts to refute much of the coverage the firm has received in light of the scandal.
Neither Cambridge Analytica nor parent SCL Group immediately responded to a request for comment.
Last month, The New York Times reported that Emerdata, a new UK firm, had been created to house Cambridge Analytica and SCL Group. That, however, might not be enough to keep public scrutiny at bay, says Tim Bajarin, an analyst at Creative Strategies.
“If the principals who made these bad decisions at Cambridge Analytica just donned a new hat, I’m not sure they’ll be successful,” he said. “The fact that they made bad mistakes while they were at Cambridge Analytica — what’s going to keep them from doing that now under a new moniker?”
Also on Tuesday, Cambridge Analytica released the results of an independent investigation commissioned into whether it was involved in any wrongdoing. The investigation concluded that the allegations against Cambridge Analytica weren’t “borne out by the facts.” (CNET)
Facebook co-founder, Chairman and CEO Mark Zuckerberg arrives to testify before a combined Senate Judiciary and Commerce committee hearing in the Hart Senate Office Building on Capitol Hill. Photo: AFP
Facebook chairman Mark Zuckerberg offered apologies to US lawmakers Tuesday as he made a long-awaited appearance in a congressional hearing on the hijacking of personal data on millions of users.
Reading from his written testimony, Zuckerberg repeated a statement he had previously made, saying the misuse of data “was my mistake, and I’m sorry.”
“It will take some time to work through all of the changes we need to make, but I’m committed to getting it right,” Zuckerberg told a Senate hearing.
Zuckerberg was making his first formal appearance at a Congressional hearing, seeking to allay widespread fears ignited by the leaking of private data on tens of millions of users to a British firm working on Donald Trump’s 2016 campaign.
The scandal has sparked fresh calls for regulation of social media platforms, and Facebook in the past week has sought to stem criticism by endorsing at least one legislative proposal, which would require better labelling and disclosure on political advertising.
Senator Charles Grassley, chair of one of the committees holding the hearing, said the scandal involving the British firm Cambridge Analytica “was clearly a breach of consumer trust and a likely improper transfer of data.”
The revelation on data mishandling “has exposed that consumers may not fully understand or appreciate the extent to which their data is collected, protected, transferred, used and misused,” Grassley said.
He added that the Judiciary Committee “will hold a separate hearing exploring Cambridge and other data privacy issues.”
More than a million British Facebook users could have had their personal data accessed by Cambridge Analytica, the company revealed on Wednesday, as it increased its estimates of the total number of users affected from 50 to 87 million.
Mark Zuckerberg, the embattled chief executive of Facebook, refused to rule out legal action against the British company and insisted that he remained the best man to lead the tech firm, flatly denying that he had been asked to resign.
In a rare teleconference with reporters, Mr Zuckerberg, 33, sidestepped questions as to why he had declined to appear before a committee of British MPs, pointing out that earlier in the day it was confirmed that he will testify before US politicians.
He said he would from now send his executives, including Mike Schroepfer, the chief technology officer, to answer internationally on his behalf.
“We announced today that I am going to be testifying in the US Congress, and I am going to be sending Schroepfer or another of our top folks to answer additional questions from countries in other places,” he said.
The entrepreneur struck an upbeat tone at times, saying he was proud of Facebook’s work in “bringing billions of people together” and defending the company from accusations of selling data to advertisers.
At other moments he was apologetic, admitting that Facebook had not done enough to protect its users and admitting that, with hindsight, he would have acted to prevent the Cambridge Analytica scandal.
“I think life is about learning from the mistakes and figuring what are the best things to do, moving forward,” he said. “I think the reality of a lot of this is that when you are building something like Facebook, that is unprecedented in the world, there are going to be things you will mess up. I think what people should hold us accountable for is learning from our mistakes.”
The people affected had their data incorrectly passed to the British election consultants several years ago after fewer than 200,000 Facebook users downloaded a quiz app in 2013 that harvested data about their friends.
Facebook told The Telegraph that 81.2 percent of total affected people were in the US, while 1.2 percent – or 1,079,000 people – were in the UK.
Facebook is now accused of failing to ensure that Cambridge Analytica deleted the data after ordering it to do so in 2015. The British company allegedly used the information to boost Donald Trump’s election campaign.
Technology bosses rarely appear in front of Washington hearings in person and have been criticised by US politicians for sending their top lawyers instead. Mr Zuckerberg has often left Washington manoeuvring to his chief operating officer Sheryl Sandberg, who has represented Facebook at previous political summits, and his appearance next week will be a first in front of US politicians.
Mr Zuckerberg may also face US senators in a separate hearing next week, although this is yet to be confirmed.
The committee’s Republican chairman Greg Walden and its ranking Democrat member Frank Pallone Jr said the hearing “will be an important opportunity to shed light on critical consumer data privacy issues and help all Americans better understand what happens to their personal information online”.
They added: “We appreciate Mr Zuckerberg’s willingness to testify before the committee, and we look forward to him answering our questions.”
Mr Zuckerberg’s willingness to appear in Washington jars with his current reluctance to face British MPs, who have twice demanded he appear in front of the digital, culture, media and sport select committee.
Last week, the committee chairman Damian Collins said it was “absolutely astonishing” that Mr Zuckerberg was not prepared to appear in person.
This week, Facebook said it had deleted hundreds of pages and accounts linked to a Russian “troll factory” accused of posting fake news and political posts during the 2016 US presidential election, in a further attempt to regain its reputation.
Mr Zuckerberg said the agency “has repeatedly acted to deceive people and manipulate people around the world, and we don’t want them on Facebook”.
Mark Zuckerberg has hit back at Apple CEO Tim Cook for disparaging Facebook’s business model.
A critique from Mr Cook suggesting the social media platform was trading privacy for profit was “extremely glib and not at all aligned with the truth”, Mr Zuckerberg, the CEO and founder of Facebook, said in an interview with Vox.
Days earlier, excerpts emerged of an interview in which Mr Cook faulted Facebook’s reliance on attracting advertisers who can use the site’s data to precisely target customers. He praised Apple’s model of selling thoroughly vetted products as superior and suggested Mr Zuckerberg had blundered into the scandal now engulfing the company.
Mr Zuckerberg pushed back on those comments, saying he rejected the premise that “that if you’re not paying that somehow we can’t care about you”.
“The reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can’t afford to pay”, Mr Zuckerberg said. “And therefore, as with a lot of media, having an advertising-supported model is the only rational model that can support building this service to reach people”.
He also drew a contrast between his company’s free service and Apple’s line of high-priced products.
“If you want to build a service which is not just serving rich people, then you need to have something that people can afford”, Mr Zuckerberg said, adding that “at Facebook, we are squarely in the camp of the companies that work hard to charge you less and provide a free service that everyone can use”.
The barbs flew between the two tech executives as Mr Zuckerberg seeks to steer his company through a data privacy crisis.
After it was revealed that a third party researcher obtained some 50 million Facebook users’ personal information and passed it along to political consulting firm Cambridge Analytica, which went on to work for Donald Trump’s presidential campaign, the social media giant has faced a torrent of criticism from both elected officials and tech titans like Mr Cook.
In an interview with MSNBC’s Chris Hayes and Recode’s Kara Swisher, Mr Cook called it “creepy” to find targeted advertisements are “chasing me around the web” and said Facebook’s revenue model compromised personal privacy.
“We’ve never believed that these detailed profiles of people, that have incredibly deep personal information that is patched together from several sources, should exist”, Mr Cook said, going on to say Facebook needed to be better regulated.
Facebook has sought to tamp down a public outcry by vowing to institute tougher privacy safeguards that limit how many personal data outside apps can harvest. The company has said that, in the years since researcher Aleksandr Kogan gleaned reams of user data and shared them with Cambridge Analytica, it has tightened its rules to bar that scale of a collection. (The Independent)
“Dumb f***s.” That’s how Mark Zuckerberg described users of Facebook for trusting him with their personal data back in 2004. If the last week is anything to go by, he was right.
Since the Observer reported that the personal data of about 50 million Americans had been harvested from Facebook and improperly shared with the political consultancy Cambridge Analytica, it has become increasingly apparent that the social network has been far more lax with its data sharing practices than many users realised.
As the scandal unfurled over the last seven days, Facebook’s lacklustre response has highlighted a fundamental challenge for the company: how can it condemn the practice on which its business model depends?
“This is the story we have been waiting for so people will pay attention not just to Facebook but the entire surveillance economy,” said Siva Vaidhyanathan, a professor of media studies at the University of Virginia.
Since Zuckerberg’s “dumb f*cks” comment, Facebook has gone to great lengths to convince members of the public that it’s all about “connecting people” and “building a global community”. This pseudo-uplifting marketing speak is much easier for employees and users to stomach than the mission of “guzzling personal data so we can micro-target you with advertising”.
Related: Billionaire Elon Musk Deletes SpaceX and Tesla Facebook Pages (Wochit Tech)
In the wake of the revelations that Cambridge Analytica misappropriated data collected by Dr Aleksandr Kogan under the guise of academic research, Facebook has scrambled to blame these rogue third parties for “platform abuse”. “The entire company is outraged we were deceived,” said the company in a statement on Tuesday.However, in highlighting the apparent deceit, the company has been forced to shine a light on its underlying business model and years of careless data sharing practices.
Sure, the data changed hands between the researcher and Cambridge Analytica in apparent violation of Kogan’s agreement with Facebook, but everything else was above board. The amount of data Cambridge Analytica got hold of and used to deliver targeted advertising based on personality types – including activities, interests, check-ins, location, photos, religion, politics, relationship details – was not unusual in the slightest. This was a feature, not a bug.
‘Extremely friendly to app developers’
There are thousands of other developers, including the makers of dating app Tinder, games such as FarmVille as well as consultants to Barack Obama’s 2012 presidential campaign, who slurped huge quantities of data about users and their friends – all thanks to Facebook’s overly permissive “Graph API”, the interface through which third parties could interact with Facebook’s platform.
Facebook opened up in order to attract app developers to join Facebook’s ecosystem at a time when the company was playing catch-up in shifting its business from desktops to people’s smartphones. It was a symbiotic relationship that was critical to Facebook’s growth.
“They wanted to push as much of the conversation, ad revenue and digital activity as possible and made it extremely friendly to app developers,” said Jeff Hauser, of the Center for Economic and Policy Research. “Now they are complaining that the developers abused them. They wanted that. They were encouraging it. They may now regret it but they knowingly unleashed the forces that have led to this lack of trust and loss of privacy.”
The terms were updated in April 2014 to restrict the data new developers could get hold of, including to people’s friends’ data, but only after four years of access to the Facebook firehose. Companies that plugged in before April 2015 had another year before access was restricted.
“There are all sorts of companies that are in possession of terabytes of information from before 2015,” said Jeff Hauser of the Center for Economic Policy and Research. “Facebook’s practices don’t bear up to close, informed scrutiny nearly as well as they look from the 30,000ft view, which is how people had been viewing Facebook previously.”
For too long consumers have thought about privacy on Facebook in terms of whether their ex-boyfriends or bosses could see their photos. However, as we fiddle around with our profile privacy settings, the real intrusions have been taking place elsewhere.
“In this sense, Facebook’s ‘privacy settings’ are a grand illusion. Control over post-sharing – people we share – should really be called ‘publicity settings’,” explains Jonathan Albright, the research director at the Tow Center for Digital Journalism. “Likewise, control over passive sharing – the information people [including third-party apps] can take info from us – should be called ‘privacy settings’.”
Essentially Facebook gives us privacy “busywork” to make us think we have control while making it very difficult to truly lock down our accounts.
‘The biggest issue I’ve ever seen’
Facebook is dealing with a PR minefield. The more it talks about its advertising practices, the more people join the #DeleteFacebook movement. Even the co-founder of WhatsApp, Brian Acton, who profited from Facebook’s $19bn acquisition of his app, this week said he was deleting his account.
“This is the biggest issue I’ve ever seen any technology company face in my time,” said Roger McNamee, Zuckerberg’s former mentor.
“It’s not like tech hasn’t had a lot of scandals,” he said, mentioning the Theranos fraud and MiniScribe packing actual bricks into boxes instead of hard drives. “But no one else has played a role in undermining democracy or the persecution of monitories before. This is a whole new ball game in the tech world and it’s really, really horrible.”
Facebook first discovered that Kogan had shared data with Cambridge Analytica when a Guardian journalist contacted the company about it at the end of 2015. It asked Cambridge Analytica to delete the data and revoked the Kogan’s apps’ API access. However, Facebook relied on Cambridge Analytica’s word that they had done so.
When the Observer contacted Facebook last week with testimony from a whistleblower stating that Cambridge Analytica had not deleted the data, Facebook’s reaction was to try to get ahead of the story by publishing its own disclosure late on Friday and threatening to sue to prevent publication of its bombshell discoveries.
Then followed five days of virtual silence from the company, as the chorus of calls from critics grew louder, and further details of Facebook’s business dealings emerged.
A second whistleblower, the former Facebook manager Sandy Parakilas, revealed that he found Facebook’s lack of control over the data given to outside developers “utterly horrifying”. He told the Guardian that he had warned senior executives at the company that its lax approach to data protection risked a major breach but was discouraged from investigating further.
At around the same time, it emerged that the co-director of the company that harvested the Facebook data before passing it to Cambridge Analytic is a current employee at Facebook. Joseph Chancellor worked alongside Aleksandr Kogan at Global Science Research, which exfiltrated the data using a personality app under the guise of academic research.
Demand for answers
Politicians on both sides of the Atlantic called for answers. In the US, the Democratic senator Mark Warner called for regulation, describing the online political advertising market as the “wild west”.
“Whether it’s allowing Russians to purchase political ads or extensive micro-targeting based on ill-gotten user data, it’s clear that, left unregulated, this market will continue to be prone to deception and lacking in transparency,” he said.
The Federal Trade Commission plans to examine whether the social networking site violated a 2011 agreement with the agency over data privacy over its data-sharing practices.
In the UK, MPs summoned Facebook’s chief executive, Mark Zuckerberg, to give evidence to a select committee investigating fake news.
“I think they are in a very bad situation because they have long benefitted from the tech illiteracy of the political community,” said Hauser.
The backlash spooked investors, wiping almost $50bn off the valuation of the company in two days, although the stock has since rallied slightly.
On Wednesday, Zuckerberg finally broke his silence in a Facebook post acknowledging that the policies that allowed the misuse of data were a “breach of trust between Facebook and the people who share their data with us and expect us to protect it”.
Facebook’s chief operating officer, Sheryl Sandberg, added her own comment: “We know that this was a major violation of people’s trust, and I deeply regret that we didn’t do enough to deal with it.”
The company will investigate apps that had access to “large amounts of information” before the 2014 changes and audit thousands of apps that show “suspicious activity”. The company will also inform those whose data was “misused”, including people who were directly affected by the Kogan data operation.
These actions don’t go far enough, said Vaidhyanathan.
“Facebook has a history of putting on that innocent little boy voice: ‘Oh I didn’t know that I shouldn’t hold the cat by its tail’,” he said. “I think we’re tired of it at this point.”
These problems were pointed out by scholars years ago, said Robyn Caplan, a researcher at Data & Society, but Facebook’s response was slow and insufficient.
“They have been trying to put out a lot of little fires but we need them to build a fire department,” she said. (The Guardian)
Facebook chief Mark Zuckerberg vowed Wednesday to “step up” to fix problems at the social media giant, as it fights a snowballing scandal over the hijacking of personal data from millions of its users.
“We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you,” Zuckerberg said, in his first public comments on the harvesting of Facebook user data by a British firm linked to Donald Trump’s 2016 campaign.
Writing on his Facebook page, Zuckerberg announced new steps to rein in the leakage of data to outside developers and third-party apps, while giving users more control over their information through a special toolbar.
Zuckerberg said measures had been in place since 2014 to prevent precisely the sort of abuse revealed at the weekend.
“But we also made mistakes, there’s more to do, and we need to step up and do it,” he said.
The scandal erupted when a whistleblower revealed that British data consultant Cambridge Analytica (CA) had created psychological profiles on 50 million Facebook users via a personality prediction app, created by a researcher named Aleksandr Kogan.
The app was downloaded by 270,000 people, but also scooped up their friends’ data without consent — as was possible under Facebook’s rules at the time.
Facebook says it discovered last week that CA may not have deleted the data as it certified.
“This was a breach of trust between Kogan, Cambridge Analytica and Facebook,” Zuckerberg wrote. “But it was also a breach of trust between Facebook and the people who share their data with us and expect us to protect it.”
“We need to fix that.”
– Probe by special counsel? –
Zuckerberg’s admission follows another day of damaging accusations against the world’s biggest social network as calls mounted for investigations on both sides of the Atlantic.
Max Schrems, a Vienna-based activist who has brought online data protection cases before European courts, told AFP he complained to the Irish Data Protection Authority in 2011 about the controversial data harvesting methods.
Schrems also recounted a seven-hour meeting with Facebook representatives the following year to discuss concerns around apps operating in this fashion but said they said they saw no problems with their policies.
“They explicitly said that in their view, by using the platform you consent to a situation where other people can install an app and gather your data,” Schrems said.
ABC News reported meanwhile special counsel Robert Mueller, who is investigating Russian interference in the 2016 campaign, was looking at Cambridge Analytica’s role in the Trump effort.
Citing anonymous sources, ABC said several digital experts who worked on Trump’s campaign have held closed-door interviews with Mueller’s team.
The British firm has maintained it did not use Facebook data in the Trump campaign, but its now-suspended CEO boasted in secret recordings that his company was deeply involved in the race.
– #DeleteFacebook –
The data scandal has ratcheted up the pressure on Facebook — already under fire for allowing fake news to proliferate on its platform during the US presidential election.
A movement to quit the social network gathered momentum, while a handful of lawsuits emerged which could turn into class actions — in a costly distraction for the company.
One of those calling it quits was a high-profile co-founder of the WhatsApp messaging service acquired by Facebook in 2014.
“It is time. #deletefacebook,” Brian Acton said in a tweet protesting the social media giant’s handling of the crisis.
Both Facebook and CA have denied wrongdoing, as attention focused increasingly on Kogan, the inventor of the controversial app — personality survey dubbed This Is Your Digital Life.
But Kogan said in an interview he was “stunned” by the allegations against him, claiming CA had assured him his activities were above board.
“I’m being basically used as a scapegoat by both Facebook and Cambridge Analytica,” he told the BBC. “We thought we were acting perfectly appropriately. ”
The University of Cambridge psychologist said CA had approached him to do the work, and that he did not know how the firm would use the data collected with his app.
European Union officials have called for an urgent investigation while British, US and EU lawmakers have asked Zuckerberg to give evidence.
Responding to Zuckerberg’s comments Wednesday, US Senator Ed Markey of Massachusetts was the latest lawmaker to call on Zuckerberg to appear.
“You need to come to Congress and testify to this under oath,” Markey tweeted.
British Prime Minister Theresa May has urged Facebook and CA to cooperate with the national information commissioner’s probe.
“The allegations are clearly very concerning,” she told MPs.
“People need to have confidence in how their personal data is being used.”
Facebook shares steadied Wednesday, gaining 0.74 percent after steep declines this week that wiped out some $50 billion in market value.
But questions abounded on the future of Facebook, which has grown from a startup in a Harvard dorm room to become one of the world’s most powerful companies.
Analyst Brian Wieser at Pivotal Research said Facebook “is exhibiting signs of systemic mismanagement,” possibly from growing too fast.
“Investors now have to consider whether or not the company will conclude that it has grown in a manner that has proven to be untenable,” Wieser said in a research note.