Historical Stock Chart
2 Months : From Jul 2019 to Sep 2019
By Deepa Seetharaman
More than a year after Cambridge Analytica's mining of Facebook Inc. user data triggered regulatory probes of the social-media giant -- leading to this week's $5 billion fine -- a new Netflix documentary highlights how poorly understood the impact of that data mining still is on American politics and society.
Netflix Inc.'s "The Great Hack" could reinvigorate debate about Cambridge Analytica's tactics and their implications for social media, data privacy and democracy, just as the U.S. enters the 2020 election cycle. The nearly two-hour film was released on Netflix Wednesday, the same day Facebook reported second-quarter earnings and finalized settlements with two regulatory agencies.
The settlements result from lengthy investigations that followed March 2018 reports that Cambridge Analytica, a now-defunct British consulting firm backed by the family of New York-based hedge-fund billionaire Robert Mercer, had improperly obtained and exploited Facebook user data. As part of Wednesday's agreement with the Federal Trade Commission, Facebook will pay a $5 billion fine and introduce new layers of oversight around its privacy practices. Facebook, which didn't admit or deny wrongdoing, will also pay the Securities and Exchange Commission a $100 million fine. Cambridge Analytica has denied wrongdoing in the Facebook incident.
The Cambridge Analytica controversy sparked an uproar and investigations on both sides of the Atlantic. It also made many people think more deeply about data privacy and surveillance -- issues that will attract more scrutiny in the 2020 election, said Shannon McGregor, assistant professor of communications at the University of Utah. "What really upset a lot of regular Americans was the extent that they could be targeted." Regarding privacy protections and political discourse, "we're likely to hear more hiccups before, if at all, we see things running smoothly," she said.
Despite the intense scrutiny, however, some questions remain. One is: Did Cambridge Analytica help Donald Trump win the presidency? Another is: What is to stop another company from exploiting Facebook and social media to influence the 2020 election?
"The Great Hack" doesn't provide many answers. Rather, it sounds an alarm about the vast amount of user data that companies such as Facebook and Google have, and the potential for its misuse.
The film charts the evolution of the data-analytics firm primarily through the lens of Brittany Kaiser, a former business development director for Cambridge Analytica, and David Carroll, an associate professor of media design at the New School's Parsons School of Design who filed a legal claim against the firm seeking to secure a copy of his personal information in its possession.
It is undisputed that Cambridge Analytica bought personal data on tens of millions of Facebook users that a psychology professor, Aleksandr Kogan, had gleaned through a personality quiz, and that Facebook failed to detect that Dr. Kogan sold the data in violation of its rules. And no one contests that Cambridge Analytica worked on behalf of the Trump campaign as well as other conservative causes.
Dr. Kogan, in an April 2018 interview, said he didn't know his work for Cambridge Analytica violated Facebook's policies, adding that the social-media company had made him a scapegoat.
The husband-and-wife team behind the film appears divided on the company's imprint on the U.S. election. Jehane Noujaim said in an interview it was "impossible to say" whether the firm effectively helped Mr. Trump win the vote. Her husband, Karim Amer, said he is more convinced that it did, pointing to past comments made by Cambridge Analytica's CEO about the company's deep well of information on voters and the firm's alleged involvement in elections where the underdog won despite long odds, including the U.S. presidential race.
Cambridge Analytica, an offshoot of the British company SCL Group, filed for bankruptcy in May 2018. Its former CEO, Alexander Nix, who previously said it used widely accepted practices for data analytics, couldn't be reached for comment. Mr. Nix told Britian's Parliament last year that he was being "subjected to frankly ridiculous accusations based on the most tenuous connections."
On Wednesday, the FTC alleged that Cambridge Analytica, along with Messrs. Nix and Kogan, deceived consumers by claiming not to have collected any personally identifiable information about Facebook users.
At the time Mr. Kogan gathered the data, he was working within Facebook's rules. After Facebook tightened its policies and learned that he shared the data with Cambridge Analytica, the social-media giant asked the company and Mr. Kogan to delete it. Cambridge Analytica said it previously deleted all the Facebook data, but federal regulators Wednesday said some individuals "still possess this data and/or data models based on this data."
Facebook didn't participate in the film. Mr. Amer said the filmmakers asked Chief Operating Officer Sheryl Sandberg and other Facebook executives if the company would discuss their documentary, but their request was declined.
"This documentary is a snapshot in time and doesn't reflect what happened next," said a Facebook spokeswoman. "After this episode, we set out on a course of radical change, introducing new practices across our platform to safeguard people's privacy. We're not the same company today."
Several former Cambridge Analytica employees say their company has been demonized in the media and that the common narrative about how the firm operated gets several details wrong. For instance, two former employees in interviews for this article said the firm didn't use the purchased Facebook data in its analytics work with the Trump campaign.
The Netflix documentary argues that Mr. Trump and other right-leaning candidates were helped by Cambridge's data work and ability to psychologically target voters. A British watchdog agency, the Information Commissioner's Office, said in a report last year that some Facebook data was "used by Cambridge Analytica to target voters during the 2016 U.S. presidential campaign process," but it didn't specify how that data was deployed. Facebook says it is conducting its own investigation into how Cambridge Analytica used the Facebook platform for its work.
The SEC's complaint Wednesday offers fresh information about when Facebook employees knew about Cambridge Analytica. In September 2015, the SEC says employees in Facebook's political advertising group had raised concerns internally about Cambridge Analytica's scraping, or use of software to compile Facebook user data.
Employees reiterated those concerns in December when a Guardian newspaper article claimed that Cambridge had misused data. Internally, Facebook employees called the company a "sketchy (to say the least) data modeling company that has penetrated our market deeply," according to the SEC complaint.
At times, the film assumes that Cambridge Analytica's methods were highly effective, a point that Facebook advertisers and researchers say wasn't the case. "There is no publicly available evidence that suggests they had a measurable impact on the election," said Daniel Kreiss, an associate professor at the University of North Carolina at Chapel Hill who studies political campaigns' use of data.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
July 26, 2019 09:15 ET (13:15 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.