How do you turn 270,000 people into 50,000,000?
With a Facebook algorithm silly!... This is the stark reality that has been exposed in the Cambridge Analytica scandal overnight.
As we increasingly adopt technology, we actively decide to use new apps like Uber, or AirBNB for convenience. But to join these sites, we either create a unique login, or for ease and convenience, we can login using a Gmail account or Facebook. It is this practice that Cambridge Analytica exploited, collecting your (Facebook) publically available information including date of birth, picture, location, relationships… and more importantly the same for your “friends”. It might be ok by you to share your details, but does every single person connected to you feel the same?
Cambridge Analytica were paid £10m by the Trump campaign to develop a psychological profile of participants so they could target the campaign better. A whistle blower has exposed this, and now regulators are pursuing Cambridge Analytica. The bigger issue is what did Facebook know?
So far, Facebook has lost $60b in market value (more than Tesla’s total value!), with Mark Zuckerberg personally losing $9b of that. The latest news is that regulators are getting involved, with the US Federal Trade Commission launching an investigation into whether Facebook violated the terms of its 2011 consent decree with the agency. Under that agreement, Facebook committed to explicitly obtaining user consent for certain changes to privacy settings. This obviously didn’t happen… and now a class action has just been filed in San Francisco.
The end of Facebook?
Before we all plot the demise of Facebook, remember it is a significant stock in terms of the overall influence it has on the share market. Most portfolios own it (either directly or via International managed funds or ETFs). Facebook is one of the 5 largest stocks (until the latest stock rout) on the S&P500. The FAANGs represent ¼ of the NASDAQ. The Financial Times is suggesting that fines could be $40,000 per compromised user… which could exceed $2t!
Watch this story closely.
Ps, to see what apps you have permissioned;
