Facebook CEO Mark Zuckerberg might want to rethink his decision to snub the UK Parliament by declining to appear in person to offer testimony on the widening scandal surrounding its
utilization abuse of sensitive user data for commercial purposes
Because, in a bombshell report published minutes before US markets close for a long holiday weekend, the Financial Times is alleging that the researcher whom Facebook has blamed for lying about his decision to collect and sell data gleaned from hundreds of thousands of Facebook users (and approximately 50 million of their friends) actually had every right to sell the data.
And the researcher, Dr. Aleksandr Kogan, even disclosed his plans to market the data in a contract issued along with an update to Kogan's app.
The problem is, Facebook approved the terms submitted by Kogan using an automated process for examining app upgrades - and none of the company's human employees bothered to manually override or reject this.
Cambridge Analytica whistleblower Chris Wylie told the FT in an interview that Facebook "didn't really do anything to safeguard the data" - citing its decision to greenlight an app that explicitly violated Facebook's own guidelines regarding the use of its data by third parties.
The big problem for Facebook CEO Mark Zuckerberg is that in an interview with CNN last week he sought to convince the public that its lax data protections were a thing of the past - and that it had adopted new guidelines sometime around 2014 that would've banned behavior like the widespread collection and dissemination of Facebook user data carried out by Kogan's app.
The guidelines also prohibited third-party app developers from selling the data to marketers or other third parties.
However, these rules were apparently routinely flouted thanks to the company's apparent lack of resources dedicated to enforcement.
And in the case of Kogan's app, the company even provided the rubber stamp of approval.
The social network was sent terms and conditions for the second version of the survey app, which pulled user data that was then leaked to Cambridge Analytica, the data analytics firm. These contradicted Facebook’s own platform policies, according to Chris Wylie, the former Cambridge Analytica employee turned whistleblower.
But the social network relied on an automated process to accept updates, so no employee at Facebook may have seen the app’s new policy, which disclosed that it could sell and transfer the data.
The first version of the app, which was reviewed by Facebook, said the opposite: it claimed to be a "research program" and said "users will be informed that the data will be carefully protected and never used for commercial purposes", the social network said.
But the Financial Times has seen a copy of a document submitted to the company by Aleksandr Kogan, the academic who built the survey app that ran on the social network. The data collected via the app was passed on to Cambridge Analytica and used to gather the information of up to 50m users.
In the document, Global Science Research, Mr Kogan’s company, outlined terms and conditions that asked users for permission to collect information, including their likes and status updates as well as those of their Facebook friends. The terms stated that the company would have the right to "edit, copy, disseminate, publish, transfer, append or merge with other databases, sell, license . . . and archive your contribution and data".
Shortly after the initial reports about Cambridge Analytica's allegedly nefarious leveraging of purportedly ill-gotten user data, Kogan expressed his surprise at being blamed for the scandal.
Looking back, it appears Kogan had a point.
Facebook's new privacy guidelines came into affect for all apps in 2015. Zuckerberg has repeatedly claimed that when Facebook learned of Kogan's violations in 2015, it banned his app and demanded that he delete the data - and provide the company with a certificate verifying that the data had been deleted.
Kogan's agreement with SCL, Cambridge's parent company, informing the company that he might soon lose access to some user data because of the new guidelines was published Thursday by the UK Parliament's digital, culture, media and sport committee.
In separate documents published by the UK parliament’s digital, culture, media and sport committee on Thursday, Mr Kogan’s company was explicit that it was operating under Facebook’s old terms of service, and he would not be able to collect the data under the new policy which came into force for all apps in 2015. The documents that Mr Wylie handed to the committee included an agreement between GSR and SCL, Cambridge Analytica’s parent company, dated June 2014. This was after Facebook had announced a change for news apps but the social network allowed a year for existing apps to adjust.
Zuckerberg has also claimed that Facebook implemented a more forceful app-review policy when it adopted those guidelines in 2014. But the documents seen by the FT suggest that this process was hardly rigorous at all.
Which begs the question: How many more apps managed to circumvent Facebook's new guidelines?
Investors are apparently worried that the number might be more than Facebook's users (or the regulators and lawmakers threatening the company with regulation and/or bankruptcy) can stomach. Shares moved lower ahead of the cash close in New York.
Maybe the report from The FT is why Zuckerberg has been such as active seller of the stock?