After a Year of Privacy Scandals, Facebook is Back to Business as Usual

Do consumers really care about privacy?

When you take all of the above into account, it’s only natural to ask: Do consumers really care about privacy? After all, despite nearly monthly privacy scandals erupting at Facebook, and seemingly endless controversy swirling around the company (and top executives like Sheryl Sandberg), users don’t seem to be going anywhere. Even in the U.S., where Facebook has faced the greatest amount of user backlash, user numbers and user engagement is growing. And that means that advertisers will stick around, too. After all, can they really afford to ignore a total market size of more than 2 billion people?

For privacy advocates, of course, Facebook’s ability to put privacy scandals in the rear view mirror has to be a bit troubling. It increasingly appears to be the case that, even if consumers say they care about privacy, they really don’t. In other words, “privacy” as a concept has value to them, but if it means paying a monthly subscription cost to Facebook or giving up any of their current utility while using the platform, they’re willing to overlook all the nasty little issues raised during Facebook’s privacy scandals. Even European users agree, despite the buzz around GDPR. They might be concerned about data transfer and what is meant by the term “by signing up you agree,” but they are not abandoning Facebook either.

In March 2018, it looked like the scandal surrounding the firm Cambridge Analytica, which shared the Facebook data of millions of users for political consulting purposes, might finally be the final straw. Suddenly, consumers could see a direct link between fake news, personal data sharing and election results. Scandalous items showing up in news feeds contributed to the success of the Trump campaign, said Facebook detractors. And regulators now had evidence that Facebook was in potential violation of its earlier consent decree with the U.S. Federal Trade Commission.

Implications for the tech industry

In fact, things were sliding so far out of Facebook’s favor that some tech analysts and commentators initially suggested that privacy might be a new form of competitive differentiation in the marketplace. If a company is able to provide superior privacy protection, the thinking went, then consumers might be tempted to abandon one platform in favor of another.

And, indeed, that seems to be the case with search engines (with consumers searching out new search tools that keep them anonymous) and web browsers. But not so much the case with social networks, where the “lock-in” effect is much stronger. In short, it’s relatively low risk and low cost to dump Google as your search engine, but it’s a lot more painful to dump your Facebook account, as long as all of your friends are still using it.

Apple, for example, has sought to get out ahead of the privacy debate, positioning itself as a champion for user privacy. It has even gone so far as to take on Facebook and Google directly, chiding them for their privacy scandals and all the data collected on users. But if users don’t really care about privacy, how viable is Apple’s strategy really going to be, if it threatens to alienate two of Silicon Valley’s biggest giants?

Going forward, everyone – business rivals, investors, consumers, regulators and privacy advocates – will be keeping a close eye on Facebook. Will Mark Zuckerberg really move forward with comprehensive reform of the social network to make it safer for personal data and information? If he fails to follow through on his promises yet again, it might finally lead to the type of public outcry that results in strict regulatory oversight of the social media company in the near future.

 


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