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SCCE/HCCA

Zuckerberg’s Capitol Hill Visit Highlights Need for Robust Compliance Program

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By Mark Speck
Partner at Specktrum, Inc.

Never was the importance of having a robust compliance program more apparent than during Mark Zuckerberg’s testimony to the US Senate’s Commerce and Judiciary committee on Tuesday to discuss data privacy and Russian disinformation on Facebook.

On the Capitol Hill stage, Facebook’s founder and CEO struggled to represent a sound data privacy policy, data retention policy, suitable due diligence assurance activities on high-risk third parties, and data user agreement that Senator Kennedy claimed, “sucks.”

“You can spot me 75 IQ points. If I can figure it out, you can figure it out. The purpose of that user agreement is to cover Facebook’s rear end. It’s not to inform your users about their rights,” said Kennedy. “I’m going to suggest to you that you go back home and rewrite it. And tell your $1,200-an-hour lawyers—no disrespect, they’re good—but, but tell them you want it written in English and non-Swahili, so the average American can understand it. That would be a start.” [Read more…]

Facebook and the Coming Wave of Litigation

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Data breach testimony

Photo Credit: South China Morning Post

By Sascha Matuszak
Reporter, SCCE|HCCA

Facebook CEO Mark Zuckerberg spent five hours answering questions from a revolving cast of senators yesterday. His testimony concerned the Cambridge Analytica data breach, which compromised the personal data of more than 80 million people. Congress is reviewing new regulations governing how tech companies manage personal data, such as the Honest Ads Act, and may even consider anti-trust action. Some senators have pointed to the fact that there is no alternative to Facebook as a sign of a monopoly; however, Facebook and Zuckerberg can influence and guide much of what comes out of these hearings, through lobbying on Capitol Hill, collaborations with politicians interested in crafting “the right regulations,” and clever answers to complex questions.

But the company has less influence over what the courts will say.

As Zuckerberg testified, the first wave of litigation hit the beach. More than a dozen legal teams filed class action lawsuits targeting Facebook, Cambridge Analytica, and other entities involved in the most recent data breach. One of them, a joint US-UK class action lawsuit filed in Delaware, where Facebook, Global Science Research Limited, SCL Group and Cambridge Analytica are all incorporated, has been brought under the US Stored Communications Act.

“US lawyers said the legislation provides for a minimum $1000 (£700) penalty for any violation found by a court,” write Owen Bowcott and Alex Hern of The Guardian. “[M]eaning that, if the case goes against Facebook, it could face damages in excess of $70bn.

This is the first suit against Facebook to include British citizens, but it is one of at least a dozen filed across the US following the data breach, including investigations by the Massachusetts attorney general and the Federal Trade Commission. The lawsuits cite not only the Stored Communications Act, but also the 2011 FTC Consent Decree that Facebook signed and allegedly failed to adhere to. Other regulations may also come into play, as the lawsuits work their way through the courts and wrangle out exactly what laws were violated by the Cambridge Analytica data breach. [Read more…]

Data Privacy and the Cambridge Analytica Scandal

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By Sascha Matuszak
Reporter, SCCE|HCCA

Much of the web-surfing world is now aware of Cambridge Analytica (CA), the UK-based data firm that helped influence global politics by leveraging data contained within the virtual profiles of millions of real human beings. The company is implicated in a major data privacy breach involving millions of Facebook users. After The Guardian published their bombshell report, featuring former CA employee and whistleblower, Christopher Wylie, UK and US regulators launched investigations, Facebook stock price dropped by as much as $70 billion, and at least one head has rolled: the CEO of Cambridge Analytica, Christopher Nix, who was suspended early last week.

The data in question came primarily from Facebook profiles, an estimated 50 million of them, slurped up via a third-party app created by Cambridge professor, Aleksandr Kogan. Kogan used Amazon’s MTurk service to pay people who took his survey, which also extracted their Facebook profiles, as well as the profiles of all their Facebook friends. Kogan then allegedly sold this data to CA for $800,000 through his company, Global Science Research (GSR). That data, as well as the profiling techniques developed by young coders like Christopher Wylie and his team, allegedly helped CA develop solutions and target messaging for several campaigns, such as Brexit, Kenya’s presidential election, and the Trump Campaign.

The revelations include videotaped conversations in which Nix boasts about CA’s ability to leverage personal data, in-depth reporting on the money and personnel behind CA and sister corporation SLC Group Limited, email correspondence between Facebook and CA regarding data breaches, and the inner workings of political campaigns using big data analytics to help win elections.

The UK Information Commissioner’s Office obtained a search warrant for CA’s London office – but not before CA was able to cart away boxes of files—and Christopher Wylie has agreed to testify before both the US Congress and the UK Parliament. Mark Zuckerberg has also come under fire for his company’s lax approach toward protecting Facebook users from this massive data breach, a breach that’s led to #DeleteFacebook trending across social media platforms. Zuckerberg has also been was summoned by the House Energy and Commerce Committee to testify on Capitol Hill,  a group of Facebook investors filed a class action suit following a precipitous drop in the company’s stock price, and the Federal Trade Commission announced on Monday that it was investigating Facebook’s data privacy practices. [Read more…]