Facebook has compromised user data again. In this latest example of the tech giant’s blatant disregard for user privacy, the company was shown to have passed personal information on users to four Chinese handset manufacturers, with close government ties.
Facebook’s troubles started earlier this week, when a report by the New York Times, revealed that over the last decade, the social network closed deals with 60 device manufacturers including Samsung, Amazon and Apple that gave the manufacturers access to a wealth of personal data, as well as access to the data of users’ friends, all without gaining user consent.
The reason for the deals was that back in the days before we had apps, Facebook wanted to enable device makers to offer Facebook on the operating systems via device integrated API’s. At the time, these agreements were potentially in violation of a 2011 Federal Trade Commission consent decree. However, Facebook has defended itself by claiming that a friends’ information, was only accessible when the user decided to share their information with that friend.
Déjà vu anyone?
It feels like only 5 minutes ago we were watching an earnest and contrite Mark Zucherberg, Facebook’s CEO, testifying in congress in the wake of the Cambridge Analytica scandal that within a year of the egregious misuse of user data in 2014, developers were prohibited from gathering information from users’ friends. However, the company failed to mention that device manufacturers had been exempted from such restrictions.
According to The Times, device manufacturers were able to access all kinds of personal information including political preferences, religion, and relationship status. Moreover, most of these partnerships are still in place although Facebook started dismantling the deals in the aftermath of the Cambridge Analytica crisis in April.
If you think that’s bad, well it only gets worse. Now, the Times and the Washington Post have both reported that four Chinese device manufacturers, Lenovo, Oppo, TCL and Huawei have been among the companies receiving personal user data from Facebook since 2010, raising serious security concerns. The reason that their agreements with the social networking leader have caused such an uproar, is their close ties to the Chinese government.
In particular, Huawei was singled out by the heads of six US agencies, including the CIA, FBI, NSA, and the Director of National Intelligence. In statements to the Senate Intelligence Committee in February of this year, they warned that using a telecoms device from the Chinese manufacturer could put you at risk of having personal data accessed or stolen due to its close relationship to the country’s authorities.
By the end of this week, Huawei’s collaboration with Facebook will be ending. However, for years, the company, and quite possibly the Chinese government, has had access to data on the likes, education, relationship and employment status of both device users and their friends. In response to concerns voiced by Congress, Facebook VP Francisca Varela claims that none of the information harvested from the integrations with Huawei was stored on Huawei’s servers, but was only stored on the device.
Users have had enough. Facebook has finally used the last of its nine lives because people have stopped calling for the social network to get its act together and start respecting user privacy. Now they are simply walking away.
Since Facebook’s last scandal, a new EU law has taken effect, the GDPR. The General Data Protection Regulation (GDPR), which went into force on May 25th, 2018, states that the user owns their personal data, and can request to see exactly what information is being gathered and how it is being used. They need to provide their informed consent for its use and can withdraw that consent at any point. They also have the right to an electronic copy of their data, which enables them to easily transfer it from one service provider to another.
While a great leap forward for data privacy, the GDPR does not do enough to redress the balance. The advertising ecosystem is fundamentally flawed. Digital ad spending reached $228 billion in 2018, but the user, while integral to the incredibly lucrative digital advertising economy, is exploited and left unprotected.
Things have to change. Even so, there is no need to throw the baby out with the bath water, as targeted advertising based on users’ online activity is an incredibly powerful tool for marketers.
The answer lies in a total overhaul of the data marketplace, with new infrastructure and technologies that can support a fairer and more democratic advertising ecosystem.
This process is already underway at the Liberdy Data Foundation, a non-profit that puts the user in control, and pays them for the use of their data. It has created a new advertising ecosystem that instead of serving the interests of a few digital monopolies, for the first time ever, prioritizes the user.
Liberdy has harnessed the combined power of the GDPR and blockchain technology to develop a system that ensures everybody benefits. The user is rewarded every time their data is used, and advertisers gain access to accurate, first-hand data that was not previously available outside the walled gardens of Google and Facebook. Equally, publishers, now requiring user consent, can incentivize users to give permission for the use of their data with premium services, gain access to a goldmine of reliable, data and are able to reach a whole new pool of potential subscribers.
The process is remarkably simple. Once the user downloads the Liberdy app, they can instantly import their data from Google, Amazon, Facebook, Instagram etc. They then select which information they wish to share, and it is automatically segmented and anonymized so information such as age, gender, location and likes cannot be traced back to the specific individual. The user chooses who to share their data with and is paid every single time they see a targeted ad or make an online purchase resulting from the data they’ve shared.
Because the Liberdy Data Foundation uses blockchain technology, all ecosystem participants benefit from a highly encrypted, transparent data marketplace, where all transactions are auditable. Since the system is decentralized, no single system stores all the data, so it is virtually invulnerable to hacks.
Facebook should be worried, since initiatives like the Liberdy Data Foundation loosen their vice-like grip on the entire data economy. The tech giant’s time is clearly almost up but while many of us are leaving the social network, we can’t stop using the internet altogether. Data is instantly collected every time we shop online, type in a search query, or write a post. We need to support Liberdy and projects like it, because we can’t afford to lose momentum. As users we need to take control, become equal partners in the advertising ecosystem and become the beneficiaries of our own data.