Facebook–Cambridge Analytica Data Scandal

Case Code: BECG160
Case Length: 13 Pages
Period: 2010-2018
Pub Date: 2018
Teaching Note: Available

Price: Rs.400
Organization: Facebook
Industry: Social Media
Countries: US
Themes: Business Ethics,

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case discusses the data breach scandal involving the world’s largest social media network, Facebook, its impact on the company, and the challenges facing the social media giant. Designed with the vision of connecting people with their friends and family to discover what’s going on in the world and to share and express what matters to them, Facebook became a popular social media company with about 2.19 billion monthly active users as of the first quarter of 2018. However, the company's continuous growth was marred by security concerns. In March 2018, Facebook was caught in a major data breach scandal in which a political consulting firm – Cambridge Analytica – pulled out the personal data of more than 87 million Facebook users without their consent. The data was allegedly used in favor of the US Presidential candidate, Donald Trump, during the 2016 elections. Further, it was found that the data was also misused to influence the Brexit referendum results in favor of the Vote Leave campaign. The tech giant’s reaction to the scandal was reportedly clumsy, defensive, and confused. When Facebook got to know about the data breach, it allegedly did not do anything and waited for months to send orders to Cambridge Analytica to delete all the data. Further, the company did not follow up to check whether the illegally acquired data had been deleted. The scandal put Facebook in a situation where it was left facing the ire of millions of Facebook users, lawmakers, and advertisers. Further, the company’s share value also dropped after news of the data breach broke out. There were several challenges facing Facebook, including hate campaigns running against it and lawsuits filed for the breach of users’ privacy protection. After the data debacle, analysts believed that it would take a few years to fix the problems caused by the leakage of users’ private data. Though the company took several initiatives to prevent such data leaks in future, it remained to be seen whether it could fix its reputation. Facebook founder and CEO Mark Zuckerberg (Zuckerberg) apologized for the ‘major breach of trust’ but was that enough to reassure users?

Issues

The case is structured to achieve the following teaching objectives:

Analyze the ethical issues arising out of the Facebook data breach scandal
Understand the role of security in social networking
Study the impact of the data scandal on Facebook
Identify the various challenges Facebook is likely to face post the data scandal
Analyze the steps taken by Facebook to prevent such incidents in the future