Facebook and Financial Firms Tussled for Years Over Access to User Data
Facebook and Financial Firms Tussled for Years Over
Access to User Data
The social network’s negotiating stance with institutions
evolved
Facebook pressed financial firms as recently as last year
for the ability to use customer data flowing through its Messenger platform.
By AnnaMaria Andriotis and Emily Glazer Sept. 18, 2018
5:30 a.m. ET
Facebook Inc. had been haggling with financial firms over
its access to users’ sensitive financial information for years, well before the
social-media company came under fire for its handling of personal data.
As recently as last year, the social-media company
pressed financial firms for the ability to use customer data flowing through
its Messenger platform for a range of purposes, including advertising,
according to people familiar with the matter and documents reviewed by The Wall
Street Journal. Concerned about privacy, several firms negotiated bespoke
agreements that limited how Facebook could use any financial information that
would pass through its servers.
The negotiations highlight a dilemma facing Facebook as
it balances its need for detailed user data to better target advertisements and
increase user engagement with concerns about how best to handle users’ most
sensitive personal information. It is an issue that has taken on new importance
following the uproar over Facebook’s ties to political analytics firm Cambridge
Analytica, which accessed information on as many as 87 million users of the
social-media network without their consent.
Facebook has in recent months taken steps to give users
more control over the massive cache of data it collects. Earlier this year, the
company changed its privacy policy to more clearly spell out how it handles
advertising and user data. In April, before the European Union began enforcing
its General Data Protection Regulation privacy law, Facebook asked users to
review information about different types of advertising.
“Like many online companies, we partner with financial
institutions to improve people’s commerce experiences, like enabling better
customer service, and people opt into these experiences,” said Facebook
spokeswoman Elisabeth Diana. “We’ve emphasized to partners that keeping
people’s information safe and secure is critical to these efforts. That has
been and always will be our priority.”
She said Facebook hasn’t and doesn’t use consumer
financial data for so-called ad targeting, or placing ads in front of specific
audiences.
Facebook’s negotiating stance with financial firms
evolved over the years, ranging from asserting ownership of all data that
passes through its servers to, later on, allowing financial firms to restrict
its use of the information. Several of the deals were negotiated ahead of
Facebook’s 2017 developer conference, when more than a dozen companies in
multiple industries, including financial services, launched services on
Messenger.
Prior to the launch, Facebook’s privacy policy said “we
use all of the information we have about you to show you relevant ads.”
In conversations with American Express Co. in 2016,
Facebook executives said they wanted to use individualized cardholder spending
data that passes through Facebook for a variety of purposes, according to a
person familiar with the matter. That would have allowed them to use the data
for ad targeting, the person said.
The companies were discussing launching an AmEx chatbot
on Facebook that would send transaction-level alerts to AmEx U.S. cardholders
who sign up for the service. Those alerts function like purchase receipts that
tell cardholders when their AmEx card has been used to make a purchase.
AmEx didn’t want Facebook to use individualized data for
anything besides servicing cardholders who opted into the chatbot, the person
said, and instead agreed to provide aggregated transaction data for ads and
other purposes.
After Bank of America Corp. reviewed Facebook’s terms, it
decided it would move its clients who engage in private messaging with the bank
on Facebook off of the site so that Facebook wouldn’t gain access to their
financial data, according to a person familiar with the matter.
When Wells Fargo & Co. launched a chatbot pilot with
Facebook in 2017, it informed customers that Facebook would have access to
their Messenger conversations with bank representatives, per its data policy.
“Customers were cautioned that they should not enter account numbers or other
sensitive data in their chatbot conversations,” a spokeswoman said. The
5,000-customer pilot ended in April.
PayPal Holdings Inc., which allows users of the payment
service to send money through Messenger, negotiated a custom contract that
prohibits Facebook from using PayPal customers’ data for advertising or any of
Facebook’s own commercial purposes, the company said.
Western Union Co., which also launched a Messenger-based
money-transfer service at the 2017 developer conference, has a custom deal that
“reflects our privacy obligations to our customers,” said spokeswoman Pia De
Lima.
The deals predate a more recent Facebook effort, reported
by The Wall Street Journal last month, to form partnerships with big banks to
offer a range of customer services through Messenger, including fraud alerts
and a feature that would show its users their checking-account balances. The
company said it wouldn’t use any information obtained through those services
for ad-targeting purposes.
Banks have been hesitant to give too much control to
Facebook. At least one large U.S. bank pulled away from the Facebook talks
because of privacy concerns, according to the earlier Journal report.
—Peter Rudegeair contributed to this article.
Comments
Post a Comment