$5 Bn fine for facebook may be peanuts, But if 5 times of $5Bn is levied could it spell a disaster?

Social media is the new fad among youngsters & oldies alike as it helps to connect with long lost friends & relatives. And one of the most widely used social media platforms which has acquired a cult status. But do you know your personalized data is being used & recorded and just imagine what will happen if it reaches the wrong hands.

Facebook is an American social media & social networking service company based in Menlo Park, California. It was founded by Mark Zuckerberg, along with his fellow Harvard college students. It is considered one of the Big Four technology companies along with Amazon, Apple & Google. Since 2006, anyone who claims to be at least 13 year old has been allowed to become a registered user of Facebook which may vary according to different local laws.

The founder’s initially limited the website’s membership to Harvard students & subsequently Columbia, Stanford & Yale students. Membership was eventually expanded to the remaining Ivy League schools, MIT & higher education institutions in Boston Area, various other universities & lastly high school students.

Facebook held its IPO in February 2012, valuing the company at $104 Bn, the largest valuation till date for a newly listed public company.  As of December 2018, it claimed to have had more than 2.3 Billion monthly active users. Many critics have questioned whether facebook knows how many actual users it has. Facebook is one of the world’s most valuable companies.

But recently as per the media reports, the US Federal Trade Commission (FTC) is about to levy $5 Bn fine on facebook and which is by far the largest given to any technology company overshadowing the 2nd largest which is $22 Mn for Google in 2012. Experts have cited that Facebook is well prepared for this & will not make any major impact on the company’s deep pockets. But this likely will impose additional restrictions leading to a lengthy stretch of even more strict scrutiny.

As per media reports, the FTC has voted to fine facebook for enduring privacy violations & mishandling of user data. Now the case moves to the Justice department’s civil division for review.

But the fact of the matter remains for a company like Facebook, which nearly clocked $56 Bn in revenues last year, $5 Bn would not in anyways cripple the company at large. As a one-time expense the company will be able to exclude the amount from its adjusted earnings results which is the profit figure investors & financial analysts pay attention to. The $5 Bn penalty may be just a slap on the wrist. But the question remains will facebook make any meaningful changes in the way it handles the data of users. This should include curbs on the information that needs to be collected on the people & how it targets ads on them.

 

See fines & penalty are just the tip of the iceberg. But what will affect its businesses will be the perception of the users towards facebook. Few months back there was a major data breach in facebook where personal data of 14 Million accounts were stolen. Hackers were able to access the name, birth date & other data of nearly half of the 30Mn accounts that were affected. Data is the new oil and personal data if in the wrong hands could do irreparable damages to ones image at large both financially as well as socially. Cambridge Analytica used the data improperly obtained from roughly 50Mn facebook accounts to try & sway the 2016 US elections. Facebook shares have since dropped by around 8% since the revelations were made public raising the concern whether social media sites are violating the user privacy as a whole. In spite of facebook reducing the access of outside apps which was connected with user data, its measures did not take effect until a year allowing Cambridge to access the data in the intervening months. Although the measures to corrective action was taken but damage once done is done forever. There have been media reports where Google & facebook know when you are watching porn even in incognito mode.

 

As per media reports in March 2018 researchers at Microsoft, Carnegie Mellon University & University of Pennsylvania analyzed a total of 22,484 websites that host pornographic contents on their platform. Upon analysis they found that 93% data leak user data to third party. Of these Google tracks about 74% of the analyzed porn sites, while oracle tracks nearly 24% sites &facebook tracking nearly 10% of sites.

The above analysis is absolutely alarming to the users and if someone could snoop your personal likes & dislikes then such data in the wrong hands could create havoc. Let me cite to you a simple example which happened in real life. There was a couple who used Voice command activated devices like Alexa or Google and it so happened that they had a general argument and the device since being connected over the internet called the police which was absolutely not essential here. So fact of the matter remains that social media & search engines store your data and god forbid if things get leaked to a third party who could salvage the accounts of the users, then the loss is for the user only.

Due to this people are becoming more informed about the data that they give & hence it is creating a lot of people deactivating their accounts & for companies like facebook or Google this is the most alarming factor to consider as they deal in data management and lesser the data, lesser the profits and earnings per share. So this basically will create a ripple effect which will eventually turn into a tsunami and once it does these companies simply will not have the strength to ward off the eventualities.

Hence its absolutely certain that yes $5Bn fine for facebook may be peanuts according to the current scenario but 5X5Bn will & most certainly will spell disaster which could lead to catastrophic results.

This wont be wrong to say data is the business and we are the product! Question is how far and deep you need to get into personal lives of citizens and who authorized this?? Facts remains most of the users are not even aware of something like this happening to them.

Humans are humans because they have a mind or their own, who allowed these guys to use our own data to predict our minds patterns and sell that to make Billions, I trust my data is my IPR STILL????

For more articles stay tuned to insourcingmultiplier.com for regular updates


Story Conceived & written by

Sumit Peer, Founder Insourcing Multiplier

Leave a Reply

Your email address will not be published. Required fields are marked *