Today, I again use an excellent material written by my daughter, Ivy Lopez Cabaltica, a US-based Ateneo-educated lawyer:
Facebook’s founder and CEO Mark Zuckerberg, 33, testified before the US Congress to answer questions about the improper use of 87 million Facebook (FB) users’ data.
MZ appeared tense, as anyone would who faces two days of questioning from 99 members of congress. Instead of his iconic Silicon Valley hoodie, T-shirt, and jeans, MZ donned a suit and tie similar to every other Washington politician. What set him apart? He was the only millennial billionaire in the room.
In 2010, FB launched Open Graph API (application programming interface) that allows external developers to contact FB users and seek permission to access their personal and friends’ data like: name, gender, birthday, location, education, page, posts, and likes. Developers need this data to develop applications (apps) that seamlessly connect with FB and other sites.
In 2013, a University of Cambridge professor Aleksandr Kogan created a survey app to study online presence and personality. The 270,000 FB users who answered the survey unknowingly gave permission for Kogan to access their friends’ FB data. This access to extended users ballooned the data pool to 87 million.
In 2014, FB changed API rules to limit a developer’s access to user data. Now a third party needs a user’s consent before they can access his friends’ data. Developers now need to get FB approval before they could request any sensitive data from users. But this change was not retroactive. So Kogan did not delete the data he collected in 2013.
Kogan later worked for a political data firm Cambridge Analytica, funded by Donald Trump backers. CA was hired to help with Trump’s presidential campaign and used Kogan’s FB data to target specific voters with tailored campaign messages.
In 2015, when FB found out about CA’s use of Kogan’s data, it banned Kogan’s app and CA and ordered the two to delete the data. CA claims it did.
Yet on March 17, 2018, a CA whistleblower said that CA used Kogan’s data to build psychographic profiles to target voters during the 2016 US elections. Three days later the Federal Trade Commission launched an investigation of FB. No word from FB. During FB’s silence, its stock fell over 5 percent worth over $4 billion.
Four days after the leak, MZ posts on his FB page that it will limit developers’ access to users’ data and audit all API developer apps who accessed data before 2014. “It is against our policies for developers to share data without people’s consent.”
Eight days after the leak, FB buys seven full page ads in US and UK to apologize for a breach of trust. “We have a responsibility to protect your information. If we can’t, we don’t deserve it.”
FB is the world’s largest online social media and networking site where its 2.1 billion monthly users post their own content to share with the public or their friends. Even if just half are active, that is still over a billion monthly users.
Just like with a friend, users share with Facebook what they care about: birthdays, celebrations, achievements, vacations, houses, cars, hobbies, jobs, get-togethers, fashion, and even grief and tragedy. FB is the first to know about events in our lives and is also the first to share any news with others.
Posts are uncensored as long as it doesn’t violate FB’s Community Standards of decency and is not illegal, prohibited, dangerous, or discomfiting.
FB has become an ego-preening machine where we post our best versions of ourselves. It’s the digital equivalent of our mom showing off our awards and pictures to guests. If we have nothing to brag about, there’s always our food.
Like an intimate friend who knows us better than we know ourselves. FB stores our user behavior and data, sees our real-time online activity, and can even predict when we are sad, happy, healthy, or looking to buy. Based on what we like, share, and click, FB knows our hobbies, habits, and interests. What we like in movies, music, food, and clothes; where we shop; what we read online; how often we go on vacation; when we are sick; and even if we are gay.
MZ repeatedly told Congress that FB users own their content, quoting FB Terms of Service (Terms). “You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings.”
Like a good friend entrusted with our cherished memorabilia, FB keeps all our pictures, comments, conversations, activity, and videos on its data centers around the world so that it is readily available for users who want to retrieve it anytime online in seconds.
FB maintains at least seven data centers worldwide to store user data. Each facility is 300,000 square foot or the size of 23 Olympic-size swimming pools. One facility is 500,000 sq ft, the same size as an Apple server farm. These sprawling centers are located where land and electricity are cheap. They are well-designed and custom-built by FB with an open-air evaporative cooling to keep the non-stop hardware from overheating.
Facebook costs billions to run. Managing FB’s eternal ocean of data takes massive computing power, land, electricity, technical skills, and manpower. In 2017, FB only had a net profit of $15.9 billion, out of its $40.7 billion revenue.
So how is FB supposed to maintain such a tremendous system without charging its users?
Like any media, FB needs advertisers to operate. Historically, advertisers seek consumers who are interested in their products, otherwise they just waste money on ignored ads. Using the only thing it has, FB monetizes its user’s online behavior and profile by specifically targeting users who will likely be interested in a particular product.There is a pervasive notion that FB sells our data. “We don’t sell user data,” MZ clarified. “We sell ads.”
MZ told congress that FB places ads on a user’s page that are relevant to them. So a luxury car manufacturer will pay FB to show its ads on the pages of users who have shown an interest in luxury cars, as revealed by their profile, content, shares, clicks, and likes.
FB can time it perfectly that a user will see an ad for a new car just after the user searched for one. This is meaningful advertising because FB offers a product to a consumer looking for it.