Your information is Facebook's business

Tuesday, 10 April 2018

Facebook said they will let users know if they think their data may have been accessed by Cambridge Analytica.

You might think it thrives on connecting people but Facebook's business model has always been to turn its users' information into money.

Facebook stores and sells your information - your age, gender, contact details, location and interests - to marketers to target people with advertisements.

It is how the company makes almost all of its money. Last year third-party advertising on its platforms, including Instagram and WhatsApp, accounted for 98 per cent of its US$40.6 billion (NZ$55.6b) revenue, Facebook said in its 2018 annual report.

Facebook made almost all of its $55 billion last year from selling people's information to advertisers.

* Up to 87 million Facebook users affected in privacy scandal

* How to stop haemorrhaging data on Facebook**

University of Waikato digital business senior lecturer Gohar Khan said the saying 'if you are not paying for a service, then you are the product,' rang true for Facebook's business model.

When you download an app and log into it using your Facebook account, the company behind that app gets access to your information, too.

Most third-party apps were developed by 'immature' companies 'who do not handle personal information securely and in an ethical way', Khan said.

That is how the Facebook and Cambridge Analytica debacle happened.

A third-party app, the Facebook personality quiz called thisisyourdigitallife, allegedly sold information from Facebook accounts to the United Kingdom-based data firm Cambridge Analytica.

Cambridge allegedly mined that information to target people with political propaganda to influence the United Kingdom Brexit referendum and sway the United States 2016 general election in Donald Trump's favour.

At least 10 New Zealanders downloaded the thisisyourdigitallife app, Facebook revealed on Monday.

By accepting the app's terms and conditions, those 10 users exposed 63,724 other New Zealand accounts to Cambridge Analytica.

Khan said terms and conditions differed between apps.

Once policies were agreed to with the click of a button, companies 'can do whatever their terms and policies allow them to do,' he said.

Companies 'should' use Facebook users' information to provide a personalised experience and make it easier to share the game between friends online, he said.

'But, it is not always the case. Social commerce relies on social interactions and personal networks to sell products [and] services. More information about your customers, [and] who they interact with, is always desirable.'

Facebook knew 'social commerce' was risky business.

In its 2018 annual report, the company listed 'security breaches', 'concerns related to privacy' and 'negative publicity' as factors that could 'significantly harm' its business.

'Improper access to or disclosure of our data or user data … Could harm our reputation and adversely affect our business,' the report said.

The report noted third-party companies misuse of users' information could lead to the same negative result.

Facebook grows its finances by more people signing up to the social media service and those already signed up spending more time using it.

The more people on its platform, the more money it can charge to more advertisers.

Anything that would lead to fewer people signing up to Facebook, or those already signed up using it less or deleting their accounts, would hurt the company's books.

Khan said using Facebook responsibly was a better option than deleting an account. Do not give it optional information such as family and relationship details, he said.

If anyone was concerned about apps misusing their data, the best option was 'not to use them in first place', by not downloading them or not logging into apps with Facebook account details, he said.