Lawsuit claims Facebook “weaponises” data

A lawsuit filed in the state of California claims that Facebook had created a scheme to weaponise personal user data to drive out competitors and ensure its success. Facebook, which became the centre of a data privacy controversy earlier this year, has denied the charges.

Background

Mark Zuckerberg, born on May 14th, 1984, is best known as the co-founder and CEO of the billion-dollar social media and networking site Facebook. Zuckerberg launched Facebook at the age of 19, as an intra-university networking site. Today, Zuckerberg is worth approximately $66 billion. He owns a 17% share in Facebook, which is one of the largest social media corporations in the world. Facebook had approximately 2 billion monthly users in 2017 and has over 14 billion registered users. It collects and stores several kinds of personal information from its users, education, employment, religion and political views, location history, and mobile phone numbers. 

The recent Cambridge Analytica scandal drew global attention to the degree of control Facebook has over personal information, sparking debates on privacy and data use. Cambridge Analytica, a data mining organisation and political consultancy, received personal information on approximately 87 million Facebook users through a third-party app. According to media reports, Facebook had known about the data breach since 2015; however, it failed to take effective action or inform users.

The company has also been criticised for its failure to address hate speech and terrorist propaganda, the presence of bots, and the proliferation of “fake news”. Facebook is thought to have been a key influencer in the 2016 US Presidential election and the Brexit vote. Mark Zuckerberg recently admitted that Facebook collects information even on those who are not registered users. Facebook has faced litigation in European courts due to this issue and is currently under investigation by the FTC.

Most recently, Facebook CEO Mark Zuckerberg met with members of the European Parliament to discuss data mining and the Cambridge Analytica controversy. Since the Cambridge Analytica scandal erupted, Zuckerberg has apologized for Facebook’s role multiple times. Zuckerberg admitted that the company had not done enough to ensure the privacy and the security of its users. However, Zuckerberg has avoided elaborating on issues such as the continued opacity of privacy settings, the ethics of Facebook’s business model, and features such as third-party access and location information. Read more here.

Analysis

Mark Zuckerberg has been accused of developing a “malicious and fraudulent scheme” to “weaponise” personal user data and use it to drive out competition. The lawsuit was filed in California by app developer “Six4Three.” The lawsuit alleges that Zuckerberg had a key role in operationalising an “anti-competitive bait and switch scheme.”

The case makes two major accusations, the first that Facebook has accessed personal user data from phones. One court document alleges, “Facebook continued to explore and implement ways to track users’ location, to track and read their texts, to access and record their microphones on their phones, to track and monitor their usage of competitive apps on their phones, and to track and monitor their calls.” Facebook recently admitted that it collects call and text data from users, however, it claims that it does so only with prior consent.

Six4Three claims that Zuckerberg weaponised this data in order to help Facebook transition from a desktop advertising revenue model to mobile advertisements. It claims that Facebook used its access to personal data to “lure” developers to invest in the platform. The court case alleges that Facebook threatened to cut developers’ access to data, if they didn’t buy expensive ads, sell their business, or transfer intellectual property. Furthermore, the case states that the Cambridge Analytica scandal “was not the result of mere negligence on Facebook’s part,” but a consequence of the “scheme” devised by Zuckerberg in 2012 to “cover up his failure to anticipate the world’s transition to smartphones.” Six4Three has claimed that 40,000 companies were deceived by Facebook in this manner.  

Six4Three lodged its first case in 2015 after Facebook cut off the company’s access to Facebook data. The company is claiming damages for its failed app, Pikinis. The app filtered pictures from users’ friends to find photos of them in swimwear. Six4Three has submitted legal documents that cite thousands of emails between senior Facebook executives, as evidence. A trial date has been set for April 2019.

Counterpoint

Facebook has rejected all accusations and said that it will “continue to defend ourselves vigorously.” “When we changed our policy in 2015, we gave all third-party developers ample notice of material platform changes that could have impacted their application,” a spokesperson said. Facebook filed an “anti-Slapp motion” stating, “Six4Three is taking its fifth shot at an ever-expanding set of claims and all of its claims turn on one decision, which is absolutely protected: Facebook’s editorial decision to stop publishing certain user-generated content via its platform to third party app developers.”

Facebook has taken some measures to address issues such as misinformation and targeted political advertisements. Ahead of the 2018 US midterm elections, Facebook has created an archive of political advertisements, which shows the campaign budget, who paid for the ad, and the average profile of the people who viewed it. Additionally, anyone buying political advertisements will now be required to provide identification details.

Assessment

Our assessment is that Facebook’s business model is partly based on the exploitation of personal user data. We believe in the current global climate, transparency and data protection are becoming increasingly important. Consumers have begun questioning the motives of companies that store and process big data. Mark Zuckerberg himself has previously admitted that regulation may be required to monitor social networks such as Facebook. As stated previously, we believe that legislation such as EU’s General Data Protection Regulation can help give consumers a degree of agency over their own data.