Business Lessons From The Facebook Scandal

If you are updated on tech issues, you already know that social media giant, Mark Zuckerberg, and his entire team are under a lot of heat because of the infamous Facebook scandal.

What really happened?

It all came to the public’s notice after a whistle-blower revealed that a few years ago, personal data of about 87 million people were inappropriately collected from Facebook and used by a political consulting firm called Cambridge Analytica.

The data collected from those 87 million people— most of whom were Americans, was used to influence the 2016 USA presidential election campaign. It is believed that this influence played a role in Donald Trump’s victory.

How was the information collected?

Cambridge Analytica hired an American researcher to collect personal data from Facebook users.

The researcher, Aleksandr Kogan, was able to get over 250,000 Facebook users to download his app and willingly take surveys. Kogan paid a small amount of money to most of the users as reward for participating —which isn’t new to the Internet.

What they didn’t know was that they were also giving out personal information of their Facebook friends as well…which is how they could amass personal data of up to 87 million people.

So what did Facebook do about this?

Facebook CEO, Mark Zuckerberg, told congress men and women that they discovered the breach months after it was done.

When asked about the actions they took to prevent the data from being used inappropriately —like influencing an election campaign, he said Aleksandr Kogan lied to Facebook by posing like he wanted those details for research purposes only.

After it was discovered that he lied in 2015, Zuckerberg claimed to have removed Kogan’s app and demanded that he (and whoever he might have sold the data to), should destroy it.

How did this affect Facebook?

Though Cambridge Analytica has totally denied using the information to influence 2016 presidential elections in the USA, Facebook has really felt the heat.

The CEO had to make more than one hearing and answered really tough questions thrown at him mercilessly by congress men and women.

To some of these questions, he had no straight answers. He was visibly uneasy, stuttered from time to time and even wore a suit. It was the first time a lot of people would see Zuckerberg in a suit.

Business wise, since the news broke out on 17th of march 2018, Facebook shares dropped by 18% just ten days after that.

A temporary #deleteFacebook movement went viral, but because Facebook is so useful, their ad sales were unaffected.

As for reputation, Facebook has really lost trust of users, and many have called for better handling of their private details and stoppage of misuse.

Zuckerberg has since apologized to the public and assures users that actions will be taken to protect them better.

The Business Lessons You Can Pick Out of This.

Now, to the part that directly affects you and me. Here are the business lessons you can pick out of the Facebook scandal.

Be transparent in all your dealings

Facebook wasn’t transparent about their dealings with personal data, that’s why trust was mentioned a lot at the hearing.

Facebook had been secretive about the whole issue, and after the whistle-blower made it open, their reputation fell.

If your customers or partners have any reason to believe you are holding vital details from them, it could ruin your brand. Just be as clear as water in all your dealings.

Take proactive measures

Don’t be so comfortable and wait for something bad to happen before taking measures to fix your business.

Even if you can’t see the future and tell which obstacles will arise, you can always set a plan for the actions to take whenever something goes wrong.

If Facebook had automatically set the app to inform users whenever their data is being inappropriately collected and used, they wouldn’t be in trouble right now.

Act fast!

Even if you miss out on taking proactive measures, don’t tarry whenever there is an attack on your brand’s image.

If you don’t act fast, tongues will start wagging and different opinions will start flying about what happened.

If you respond immediately, it will reduce the effect of damage already done and save you from further losses.

Facebook wasn’t proactive about issues like this and even when the news started making headlines, Zuckerberg delayed in addressing it.

When you are wrong, admit it and apologise

We just have to respect Mark Zuckerberg’s leadership and damage control skills here.

He made his mistakes and was dragged in ways that could have been prevented. But his message to the public chilled minds that are still doubting Facebook’s credibility.

His Facebook post emphasized that Aleksandr Kogan and Cambridge Analytica were to blame for the breach. But he later admitted his own fault by telling users he had failed them and promised better security.

Such humility goes a long way in restoring trust. Always swallow your pride and make apologies when you are at fault, your reputation and business continuity depends on it.

4 Comments

  1. All i can say,United states wants a clear way of regulating Facebook. While the real culprit Cambridge Analytica is free not queried. I guess Cambridge should be sued for damages!

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