Advertisers threaten to quit Facebook over Cambridge Analytica scandal - Zuckerberg says sorry for ‘major breach of trust’

Advertisers threaten to quit Facebook over Cambridge Analytica scandal
Zuckerberg says sorry for ‘major breach of trust’

By Mark Bridge, James Dean | Billy Kenber March 22 2018, 9:00am

Advertisers threatened to abandon Facebook last night as Mark Zuckerberg apologised for mistakes it made over the Cambridge Analytica scandal.

Mr Zuckerberg, co-founder and chief executive of the US technology giant, broke his silence to head off a revolt among users and financial backers. He described the incident as a “major breach of trust” and said he was open to further regulation of the website.

ISBA, a British group of advertisers that spend hundreds of millions of pounds a year on Facebook, demanded answers. It is understood that some of its 3,000 brands, which include those of the consumer goods companies Unilever and P&G, will not tolerate association with Facebook if it emerges that users’ data has found its way into the hands of brokers and political campaigners without authorisation. Sources close to the trade body said that if the company’s answers were not satisfactory, advertisers might spend their money elsewhere. ISBA will meet Facebook executives this week.

The row centres on claims that Cambridge Analytica, the British company embroiled in allegations of election meddling, obtained the personal data of 50 million Americans without consent. Facebook’s lax terms allowed app developers to access the data of users and their network of friends with no checks to prevent it being sold on, it is claimed.

Several financial groups said that they would stop buying Facebook shares for their ethical investment funds or were reviewing their holdings. Nordea, the largest bank in the Nordic region, which manages about £283 billion, said that it had put some of its Facebook investments in “quarantine” while it assessed the scandal. Union Investment, a German group that manages about £255 billion, said that it was reviewing its holding of Facebook shares.

Investors are also suing Facebook, claiming that it made “false and misleading statements” about policies that failed to prevent Cambridge Analytica from obtaining data intended for use by a Cambridge University researcher, Aleksandr Kogan.

A Maryland woman who said that she was “frequently targeted with political ads while using Facebook” during the 2016 US election filed a separate suit against Facebook and Cambridge Analytica, alleging that the companies had treated her personal data with “absolute disregard”. Cambridge Analytica denies that it used Facebook data to “microtarget” political adverts when it worked for the Trump campaign.

Facebook shares closed up 0.7 per cent at $169.39, halting a slide that wiped $50 billion, or 9.2 per cent, off the company’s value on Monday and Tuesday. Last year Facebook reported $40.7 billion in sales, almost all of which were from digital advertising.

Mr Zuckerberg, 33, initially stopped short of apologising but later told CNN: “This was a major breach of trust and I’m really sorry that this happened. Our responsibility now is to make sure this doesn’t happen again.”

In a Facebook post Mr Zuckerberg pledged to investigate thousands of suspicious-looking apps and ban developers that refused to comply with an audit. He added: “We will restrict developers’ data access even further to prevent other kinds of abuse. For example, we will remove developers’ access to your data if you haven’t used their app in three months. We will reduce the data you give an app when you sign in to only your name, profile photo and email address.”

“We’ll require developers to not only get approval but also sign a contract in order to ask anyone for access to their private data. We’ll have more changes to share in the next few days.”

Mr Zuckerberg added that he was open to further regulation of internet companies and would testify before Congress if he was best placed to answer their questions.

Matt Hancock, secretary of state for digital, culture and media, said that the changes did not go far enough. “It shouldn’t be for a company to decide what is the appropriate balance between privacy and innovation and use of data. Those rules should be set by society as a whole and so set by parliament,” he told the Today programme on BBC Radio 4.

Brian Acton, the co-founder of WhatsApp, led calls to delete Facebook, which trended on Twitter. Mr Acton, whose company was bought by Facebook for £16 billion three years ago, wrote: “It is time. #deletefacebook”. It received 10,000 “likes”.

Damian Collins, chairman of the digital, culture, media and sport select committee, tweeted: “Mark Zuckerberg hasn’t addressed why Facebook didn’t deal with concerns about the exposure of user data at the time and the risks now.”

Yesterday Dr Kogan, the Russian-linked Cambridge academic who obtained the data of 50 million users by offering “personality quizzes” before selling the data to Cambridge Analytica, told the BBC that “tens of thousands” of apps could have done the same thing.

Facebook said that its audit would include every app that has collected large amounts of data since the platform launched in 2006. “If the audit turns up anything bad we’re going to shut the app, we’re going to delete the data and we’re going to inform people,” Chris Cox, chief product officer, told Today.

A Facebook whistleblower told MPs that the company had ignored his warnings and lost control of users’ data by giving easy access to developers. Sandy Parakilas said that when he worked at the company in 2011-12 “personal identifiable data was basically allowed to leave Facebook”. He told MPs that he had warned executives that poor safeguards could enable foreign powers or data brokers to harvest data.

ISBA said: “The claims that other apps using the Facebook platform, and pre-dating 2015, have collected similar bodies of personal data and that controls for distribution have been inadequate, raise questions about the possibility that Facebook data has been, or is being used improperly elsewhere. ISBA is asking Facebook for a full account.”

It was reported last night that Cambridge Analytica was offered material by Israelis who appeared to have obtained emails from two politicians. Staff were asked to handle material that they assumed had been illegally gathered while working on election campaigns for candidates in Nigeria and St Kitts and Nevis, The Guardian said. Cambridge Analytica’s parent company, SCL Elections, denied taking possession of or using any hacked or stolen personal data for any purpose in either campaign.

Cambridge Analytica was set up in effect as a brand name for the company’s data analysis services in 2013.


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