​Jeff Kagan: Facebook's Data Privacy Breach Problems Just Beginning

Jeff Kagan |


I really hate to have to say this, but I told you so. This latest Facebook (FB) breach of data privacy is terrible and shocking to most, but I have been sounding the alarm for years. Many have been. Their enormous current problems are of their own making. And I would say there is more bad news to come from this Facebook nightmare before things might just settle down. A whole lot more.

These problems could have and should have been prevented and avoided if Facebook executives were focused on where they should have been… protecting users first. Protecting user privacy. But they were purely focused on growth not thinking anything could ever jump up and bite them in the rear end like it just did.

In my columns, speeches, executive lunches and general conversations I have been discussing this breach of privacy from Facebook and other companies. I have been waiving the red flag for years. Users cared, but since there was no other place to go, they were stuck with Facebook. Now users are just starting to grasp the enormity of the problem and what they have lost.

First, this is the real problem with only having one vendor in a space. There is no pressure for that vendor to go above and beyond and to protect the user. Why should they. Users have no place to go. No competitors kept Facebook from worrying. That’s why there needs to be competitors in every space.

Facebook is a Monopoly That Needs Competition

Facebook only seems to care about growth. About rewarding the investor. However, even investors and executives are users and they are also hurt by this breach of privacy the same as everyone else.

In fact, many executives of many similar companies do not let their children use their technology. They know the damage it can cause to society. It’s like the singer Madonna not letting her children see her perform, but let’s every other kid do so. What about the rest of us?

That fact just slapped Facebook in the face. And like with Equifax (EFX), we get hurt and have no way to avoid the swinging sword. So, what happens next? Will Facebook wake up? Will they do enough to change things? Will they protect users? Can they even do so at this late stage?

When Facebook started in Mark Zuckerberg’s college dorm room, he had no idea what he was creating. What it would look like a decade or two down the road. The trouble he would have to protect us from.

Are Mark Zuckerberg and Sheryl Sandberg Apologies Enough?

At the time, Zuckerberg was just a kid. And the basics of Facebook had nothing to do with making money. It was just a way to exchange personal information and link fellow students and friends, electronically.

Then everything changed. Money changes everything. After going public, investors demanded growth. So, Zuckerberg and Sandberg needed to show growth. That’s when they buckled down and transformed Facebook into a growth company. They acquired many other companies, started charging for ads and the company grew.

They did a remarkable job and I don’t believe either of them had any of this privacy breach in mind. I don’t think there was any malice thought. I think they were as shocked as the rest of us.



Facebook Focusing Solely on Growth Was the Problem

However, focusing first on growth was the problem. Zuckerberg and Sandberg are ultimately responsible. They are the head of the company. They should have been paying attention to the changing industry. To the risks and the threats. Not just from competitors, but for customers. They should have protected users. Stayed on top of things.

Only they had the power to protect us. But they didn’t.

They seemed to pay attention to the growth opportunities, and investors loved that. What they missed was paying as much attention to the threats. And that problem grew into the mountain that is now shaking, threatening Facebook.

Facebook problems are only beginning. Like a monster, this problem grew and grew and grew. Facebook has had its feelers reaching out like an octopus trying to get their hands on every bit of usable data from every user. They never saw any harm.

Do You Feel Violated by Facebook, Google, Amazon Yet?

They were blind. Many in the marketplace have been shouting from the tops of our lungs. Now that you have been blindsided, do you feel violated?

You should. And it’s not just Facebook. What do you think Google (GOOGL) does with Gmail and all the searches you do? Today, that’s valuable marketing data. That’s bad enough. Tomorrow, it could be used for all sorts of reasons. Same with Amazon (AMZN). How do you think they know what ads to pepper you with offers via email? They are watching you and selling to you.

Apple (AAPL) does the best job at protecting user privacy. User privacy needs to be front and center. Period.

A growing number of companies take and use our private data to become more important and show growth. Many users don’t mind. However, many others do. They mind very much. They feel violated.

Personal and Private Data Never Disappears

Most people don’t think of it this way, but data never disappears. Whatever words you type, whatever choices you make, your information sticks around on servers, forever. So, how about now? Do you feel violated yet?

The ads Facebook are running sound good. They say how Zuckerberg and Sandberg are sorry for this crisis. I believe them. However, even though they are sorry, is that enough? Sorry does not fix anything. It does not reverse the problem we all still have to deal with going forward.

Users must be protected. Users should be given the choice whether to opt-in or opt-out of this trap. That is the easy solution that was ignored so Facebook executives could focus on growth. That’s the rub. The user has no power.

Creating a place where everyone wants to be, needs to be, is not an excuse for subjecting users to this kind of devastation. This is the same kind of crisis Equifax is dealing with. Except that’s even worse. People don’t even have the choice to join or not. They simply are part of the Equifax world. At least users have the choice whether to join Facebook or not. But being the only place, leaves every users privacy up to the company.

Facebook is not the first and they won’t be the last. There have been countless companies wrestling with data breaches for years. Big names. Brands names we are all familiar with. However, each of them have competition and customers could leave. That created an urgency to solve the data security problem.

Where will the urgency come from for Facebook? We can see how embarrassed Zuckerberg and Sandberg are. I feel bad for them since I know they didn’t leave this vulnerability open by design. Yet they are still responsible.

Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
FB Facebook Inc. 183.80 0.00 0.00 80,717 Trade
GOOGL Alphabet Inc. 1,075.31 -8.70 -0.80 1,118,448 Trade
AAPL Apple Inc. 187.16 0.00 0.00 270,164 Trade
AMZN Amazon.com Inc. 1,581.40 0.00 0.00 27,783 Trade
EFX Equifax Inc. 115.64 -0.85 -0.73 855,869 Trade

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