No stranger to public discontent, Inc. is digging out of one of its biggest crises yet. The personal data of up to 87 million users, mostly in the U.S., was obtained by an analytics firm that, among its other work, helped elect President Donald Trump. In response to that revelation, lawmakers and regulators in the U.S. and U.K. increased their scrutiny of the social media giant, and at least some Facebook users canceled their accounts. The uproar has only added to the pressure on Facebook and Chief Executive Mark Zuckerberg over how the company was used during the 2016 presidential campaign to spread Russian propaganda and phony headlines.
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 300,000 Facebook users, most or all of whom were paid a small amount, downloaded Kogan's app, called This Is Your Digital Life, which presented them with a series of surveys. Kogan collected data not just on those users but on their Facebook friends, if their privacy settings allowed it — a universe of people initially estimated to be 50 million strong, then upped to 87 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. “We clearly stated that the users were granting us the right to use the data in broad scope, including selling and licensing the data,” Kogan wrote in a March 18 email obtained by Bloomberg.
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 says his app's terms and conditions specifically allowed “commercial use.” 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.
4. Has the data been destroyed?
The New York Times — which broke the story along with The Observer of London — reported on March 18 that emails and documents suggest the firm “still possesses most or all of the trove.” Cambridge Analytica has maintained that it deleted all the data Kogan provided and, at Facebook's request, “carried out an internal audit to make sure that all the data, all derivatives, and all backups had been deleted.” Facebook's chief technology officer, Michael Schroepfer, said in an interview on April 5 that pending the results of investigations, “we don't know exactly what they have.”
5. Why did Cambridge Analytica want the data?
It uses such data to target voters with hyper-specific appeals, including on Facebook and other online services, that go well beyond traditional messaging based on party affiliation alone. This is known as “psychographic” targeting or modeling.
6. 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 Times reported, citing company emails and financial records.
7. Who is Cambridge Analytica?
It's a company that “uses data to change audience behavior,” both commercially and politically, according to its website. Its London-based affiliate, SCL Group, has a history of dubious tricks in elections around the globe. Cambridge Analytica worked in support of the 2016 campaigns of Trump, Ted Cruz and Ben Carson, all Republicans. It was founded in 2013 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. Days after the first reports about Facebook data, Cambridge Analytica said it had suspended its chief executive officer, Alexander Nix, who caught on camera boasting about the firm's willingness to use bribes, entrapment with sex workers and other possibly illegal tactics to undermine political candidates.
8. Did the Facebook data help Trump win the presidency?
Cambridge Analytica flatly denied using Facebook data from Kogan's firm in the 2016 election or employing psychographic modeling techniques on behalf of Trump's campaign. But it's not clear whether the firm used the Facebook data in other ways to better understand and target voters. Whether Cambridge Analytica's models really work is itself a point of contention; even some of the firm's clients have said they saw little value in it.
9. 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.
10. What's been the fallout?
Facebook shares dropped almost 18 percent in the 10 days after the news broke on March 17. An online “#DeleteFacebook” movement drew some high-profile support, though Zuckerberg says there's been no “meaningful impact” on Facebook's business. Facebook said it removed a feature that let users enter phone numbers or email addresses into Facebook's search tool to find other people. The company also will make it easier for users to adjust their privacy settings.
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