Cambridge Analytica and Facebook data breach: A corporate social responsibility analysis

Cambridge Analytica, which is at the center of a huge Facebook data breach, has come under scrutiny for its role in interfering with our democratic processes on both sides of the Atlantic, meddling in Brexit Referendum and Donald Trump’s election.

The shattering revelations that have emerged in the latest days about the corporate misconducts carried out by Cambridge Analytica have forced us to have this moment of reflection. The gist of this article is not to offer a description of the facts that have already been given by media but to analyze some of the most relevant corporate social responsibility issues arising from this scandal.

The irresponsible behavior of social-media corporations

The Cambridge Analytica scandal has demonstrated for the umpteenth time that social-media companies have adopted an irresponsible business model. Companies like Facebook have become incredibly powerful because of the combination of their addictive-by-design nature and the capability of collecting data about the users’ behaviors.

For instance, using the simple expedient of introducing the “like” button, which enables users to easily interact with the content present on the platform, Facebook has gained from 2009 onwards the unrivaled capability of gathering information about personal preferences and recording every single endorsement of its users. It is not surprising that in 2016, Facebook rolled out its new “reactions buttons” across the world. The five new emotions – Love, Angry, Sad, Haha and Wow – give the company greater and more detailed access to users’ personal preferences or feelings. The issue is that the vast majority of users are unaware of the circumstance that this more accurate information may be used to manipulate their own behavior.

The irresponsible corporate conduct of social-media corporations lies in the fact that the access to this incredibly valuable information has not been accompanied by the adoption of adequate measures to avoid any possible misuse of the platform, and to raise the awareness of users about the risks connected with the use of social media. On the one hand, those risks are related to the possible exploitation of such platforms to spread fake news by disinformation operators, who are typically indistinguishable from any other user; on the other, there is the risk that third parties may obtain the personal data gathered by social-media companies and use them in improper ways as it occurred in the Cambridge Analytica case.

It is not surprising that in the last two years, Facebook, Google, and other social-media corporations have contended with several controversies, including charges that they helped spread false news, unwittingly facilitated Russian meddling in the US 2016 election and Brexit referendum, and fanned political polarisation.

In truth, this issue is not related only to social-media companies; other businesses such as cable TV and talk radio can be used to spread fake news. However, because of their very nature, social-media platforms wield extraordinary influence on our democratic societies. Suffice here to say that Americans touch their smartphones on average more than 2,600 times a day and that users in America click the “like” button on Facebook about 4m times a minute. As Tim O’Reilly wrote in his book WTF: What’s the Future and Why It’s Up To Us: “Another big difference between the web and traditional well-controlled collections is that there is virtually no control over what people can put on the web. Couple this flexibility to publish anything with the enormous influence of search engines to route traffic, and companies which deliberately manipulate search engines for profit become a serious problem.

The political discontent that these issues have generated in our parliamentary democracies is clearly illustrated by the following statement that Sen. Dianne Feinstein made (from min. 13:30) during the hearings that were part of the U.S. Congress’s investigation into Russia’s actions in Trump’s election: “[…] I saw really for the first time how effectively Russia has harnessed the tremendous and, quite frankly to me, frightening power of social media. They showed us how millions of Americans are reached and how Russia successfully used fake accounts […] to shape and manipulate opinions […] What is really staggering and hard to fully comprehend is how easily and successfully they turned modern technology to their advantage.”

The situation is aggravated by the fact that, although the titans of Big Tech have seen how the power of their platforms could reshape the economy and are perfectly aware of those issues, they have not adopted any viable corporate social responsibility solution. It is then understandable that the sector is facing a period of profound crisis characterized by the fact that the population is starting to use social-media platforms less, their costs are soaring, and regulation looms. Earlier this year, the billionaire investor and philanthropist George Soros even defined Facebook and Google at the World Economic Forum as a “menace to society.”

Investigative journalists, whistleblowers, and leakers: the heroes of our time

The Cambridge Analytica scandal has underlined again and again the crucial role that investigative journalists, whistleblowers, and leakers play in unveiling corporate misconducts, as well as the shady deals and corrupt practices that constitute the unethical way in which corporate executives operate.

The scandal has been revealed thanks to the painstaking work carried out by the Observer and the Guardian, whose journalists have spent a year analyzing documents, gathering eyewitness reports, and investigating the matter.

Their success has also depended on the courage of two whistleblowers, Shahmir Sanni and Christopher Wylie,  who were brave enough to speak about the misconducts perpetrated by Cambridge Analytica.

We also must not forget the importance of leakers, who on many occasions have exposed the true corrupt face of business. It has been only thanks to a series of documents unveiled during the Paradise Papers Scandal that it was revealed how two Russian state institutions with close ties to Vladimir Putin funded substantial investments in Twitter and Facebook to influence the US politics.

Over the course of the last decade, whistleblowers have become of vital importance for revealing the companies who commit serious misconducts and helping the authorities in prosecuting them. Their role has been essential even for fighting against corporate pollutant activities. For instance, it was only thanks to the revelations by a former engineer on a cruise ship that, in December 2016, Princess Cruise Lines paid U.S. federal enforcement authorities $40 million to settle charges the company dumped oily substances into the ocean.

As I mentioned in an article I wrote on the Conversation, as a tribute to the killing of the Maltese investigative journalist and blogger Daphne Caruana Galizia, over the last decade, the most significant steps forward in the fight against corporate misbehaviours have been made thanks to the courage of leakers, whistleblowers and investigative journalists, who help bring the most serious allegations of misconduct to light. They are the true heroes of our time, and the ineffectiveness of internal controls and external auditors means we must rely on them to identify corporate malpractices. So we should do our best to ensure they are supported and protected, and react strongly against any attempt to suppress their actions.

As mere examples, we should put more effort into changing the dominant corporate subculture by which whistleblowers are seen as traitors instead of positive actors; we should establish for all investigative journalists, whistleblowers and leakers, who unveil corrupt practices, protection programs similar to the ones used to protect those who help us in dismantling organized criminal groups; we should lobby for the introduction of programs not only for protecting but also rewarding corporate whistleblowers, as the one created for the U.S. Securities and Exchange Commission through Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act or, the one introduced more recently in the U.S. by the Motor Vehicle Safety Whistleblower Act of 2015, which aims at giving industry insiders a financial incentive to bring to light safety-related problems.

Corporate Misuse of Wealth and Power

Last but not least, the Cambridge Analytica scandal is illustrative of a corporate system based on pure greed, which not only ignores stakeholders’ needs but exploits the weaknesses in society for the sake of profit.

Alexander Nix, CEO of Cambridge Analytica, spoke to undercover reporters from Channel 4 News about the dark arts used by the company to help clients, which included entrapping rival candidates in fake bribery stings and hiring prostitutes to seduce them.

The following statements of Christopher Wylie, one of the Cambridge Analytica whistleblowers, show not only how deeply unethical the conducts perpetrated by the company were but also how the very corporate structure of the company facilitated those irresponsible behaviours:  “Yes it was a grossly unethical experiment because you are playing with […] the psychology of an entire country without their consent or awareness […] in the context of the democratic process [Then, in response to the question of the Guardian journalist, who asked Wylie if he thought about the immorality of the business operations he was carrying out, the whistleblower answered] You know… the company… we didn’t do good job at due diligence, so no… we didn’t… […] we were solely focused on gathering those data and doing this experiment.

The whistleblower also depicted in a clear way the CEO of the company: “[…] Alexander Nix […] he is ambitious he cared more about winning than what we actually did at the company, he is an upper-class Etonian who expects people to follow him wherever he goes.” From this statement, it emerges clearly that the CEO experienced what evolutionary biologists define as the “winner effect,” i.e., a self-destructive, irrational behavior, where risk-taking becomes increasingly foolish. Finally, the scandal is giving serious cause for concern about the education system presently in place. The risk is that, in the competitive environment generated by globalization, schools and universities that offer “elitist” education may in some way foster a conviction in personal success that may easily lead to a corrupt stubbornness that insists on success at any cost. To combat this phenomenon, our educational institutions should focus more on educating future international business leaders on the importance of business ethics and corporate social responsibility.

6 thoughts on “Cambridge Analytica and Facebook data breach: A corporate social responsibility analysis

  1. Great analysis Costa. I would add that Corporate Governance is added to the vital education that is provided to current and future business leaders in conjunction with business ethics and corporate social responsibility. These should be ongoing too; so that irrespective of socioeconomic backgrounds, business leaders are constantly helped to grow in their understanding of risks associated with new technologies. I’m afraid what we have witnessed and are witnessing, may be the beginning of more irresponsibility to come if not urgently and adequately addressed as I advocated in my #AI paper https://corporatesocialresponsibilityblog.com/2018/03/12/a-case-for-the-responsible-use-of-artificial-intelligence-in-global-financial-services/

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    1. Dear Lola,

      Thank you very much for the positive comment.

      I think there is a lot more to investigate on the correlation between elitist education and corporate immoral behavior. There is an entire culture of impunity of the elites that has been fostered for generations. Elitist institutions cannot act as a byproduct of the dominant society.

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  2. I really enjoyed reading this post, Costa. It kept me engaged throughout and provided a detailed CSR analysis. I would also like to bring to your notice that The Cambridge Analytica scandal has recently also caused an uproar in India’s politics as well. There are numerous suspicious signs accessible that demonstrate that the Congress Party abused the administrations of the organisation.
    The ruling party, BJP claim that Congress have utilized and abused Cambridge Analytica amid the Gujarat races. Also, when they (Congress) are found to be guilty, they are stating that they have no association with the organisation.
    BJP claim that Congress’s whole online networking effort has been dealt with the assistance of Cambridge Analytica.

    Congress meanwhile claim that it is the BJP that have association with Cambridge Analytica. They claimed that online profiles of CA uncover the organization assumed a key part in BJP’s crusade in four states, incorporating Bihar races in 2010. AICC conveyed duplicates of the web profile of CA and its India accomplice Ovelina Business Intelligence (OBI). Congress Party claim that BJP’s industrial facility of phoney news delivers phoney question and answer sessions, counterfeit plans, counterfeit twists and phoney proclamations and that they have turned into the regular character of BJP and its ‘rebellious’ clergyman of law.
    This is currently a burning issue in the nation!

    https://timesofindia.indiatimes.com/india/whistleblower-names-congress-as-client-of-cambridge-analytica/articleshow/63491689.cms

    https://timesofindia.indiatimes.com/india/cambridge-analytica-tied-to-bjp-not-us-claims-congress/articleshow/63405964.cms

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