When Sharing Isn’t Caring: Facebook’s Data Dilemma

May 1, 2019


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2 min read

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What's going on here?

Facebook’s data-sharing deals with 150 major technology companies have come under criminal investigation.

What does this mean?

A New York grand jury has summoned records from at least two major companies which had been granted access to the personal information of millions of Facebook’s users – often without consent. A grand jury is a pretrial legal process used to decide whether a prosecution should take place. Included among the 150 companies are Apple, Amazon, Netflix, and Spotify. The deals gave the companies access to personal messages, friend lists, contact information and other data.

What's the big picture effect?

America is considered the Wild West in data protection due to its laissez-faire approach. As a result, a formidable multi-billion dollar “data brokerage” (data selling) industry emerged which has led data to be dubbed the “new oil”. Acxiom, one of the largest data brokers (which was also partnered with Facebook until 2018) is estimated to be worth $3 billion alone.

The social media network is already facing a potential multi-billion dollar fine from the Federal Trade Commission (the US government agency tasked with consumer protection) for violating its 2011 consent decree. The 2011 agreement required Facebook to seek permission from its users to share their data with third parties, as well as to notify the FTC when third parties misused this data… Facebook failed to do that. The FTC is now considering the data-sharing deals as they negotiate the fine. It would be the largest penalty imposed by the FTC since Google’s $22.5 million fine.

This demonstrates that even in the “Wild West”, regulators are now taking a tougher stance on data regulation. Many people are worried about the power of big tech companies. One person in particular who has concerns is US politician Elizabeth Warren. Warren fears that the size of these tech giants can create unfair competition as they monopolise our personal data and stifle innovation. Warren argues that the lack of data regulation crushes small businesses who lose their chance to develop innovative products. On the other hand, bigger tech companies argue that tougher regulations would make them more risk-averse, slowing their ability to innovate.

So how do law firms fit in? Lawyers need to ensure that their clients comply with the increasingly complex data regulations that will be costly to breach. Law firms also need to ensure that their clients are fully receiving adequate consents from their customers when storing their data.

The facebook criminal investigation is an important one. The result will tell us if the “Wild West” is still as wild as it once was.

Report written by Heerim H

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