Why Facebook Has Been Able to Get Away with Privacy Issues
Behavior only changes when it faces enough of a penalty. That isn’t close to happening for Facebook.
PHOTO CREDIT: Getty Images
You may have heard the latest in the ongoing Facebook data saga. The Wall Street Journal did some testing and found that multiple apps passed on private information to Facebook.
The social-media giant collects intensely personal information from many popular smartphone apps just seconds after users enter it, even if the user has no connection to Facebook, according to testing done by The Wall Street Journal. The apps often send the data without any prominent or specific disclosure, the testing showed.
It is already known that many smartphone apps send information to Facebook about when users open them, and sometimes what they do inside. Previously unreported is how at least 11 popular apps, totaling tens of millions of downloads, have also been sharing sensitive data entered by users. The findings alarmed some privacy experts who reviewed the Journal's testing.
Some of the apps have already stopped sending the data, according to the Mercury News. But how much has already been sent over and how many others continue?
Facebook's history has been replete with one personal data and privacy problem after another. With CEO Mark Zuckerberg holding virtually absolute control, until he changes his mind, nothing else will.
To change Zuckerberg's mind would take immense pressure. But so far that hasn't happened. A new poll shows that while a big majority of consumers are worried about data privacy and their personal information, only 45 percent have updated their privacy settings in software they use. And only 16% have walked away from a company because of the way it's used their data.
There's also little chance that a big company will face a financial loss large enough to cause them to change their behavior. Their expenses over data losses are infrequent and the magnitudes involved generally small compared to their revenues and profit margins.
That leaves regulation to rein in a company like Facebook. How often does that happen? Seldom, at least in the U.S. Fines are usually comparably trivial to the money the company makes. Plus, the chance of getting something that would pass through both the House and Senate and then get a presidential signature is close to zero these days. The EU does have more stringent regulation and measures, but even then the result upsets things for maybe a quarter and then it's back to normal money making.
But that's under normal circumstances. There are times that a company is so brazen in its outlook that government does react. The old pre-breakup AT&T, IBM, and Microsoft have all felt the hammer come down.
Facebook is coming close to that point. Sadly, if it happens, it will all have been so unnecessary. What if Facebook had grown a little slower than it did or had taken much better care of customers' data? Would it have been so terrible? Probably not. Investors might not have been as happy as now, but it seems unlikely they would have run away. And when leaders don't consider the problems, you can get situations like Papa John's or Uber, where a founder or cofounder who was CEO or board chair is forced out of the position.
For startups and smaller companies, examples like this are important to consider. What might seem like a good idea to ramp up quickly can become a constriction over time. Better to consider what your strategy and tactics might do in the long term and find better ways to move forward.