Cambridge Analytica Scandal: An Ethical and Legal Analysis

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Business Law Assignment

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The number of cases involving immoral actions has increased across the globe which
raises the importance of business ethics in corporations. Organizations focus on gaining a
competitive advantage over their competitors by engaging in unethical mediums which
raises the importance of compliance with corporate governance principles to ensure that
companies consider the interest of all their stakeholders while taking business actions
(Kubasek, Brenna & Browne, 2017). This essay will focus on evaluating the case of
Cambridge Analytica scandal in which the privacy of millions of Facebook users was
breached. This essay will identify the ethical dilemma which arises in this scenario and
evaluates it based on two ethical frameworks which include Utilitarianism and Deontological
ethical theory. The legal concepts relating to consumer protection will be analyzed in this
essay to evaluate how Facebook has violated its policies. Three additional legal topics which
apply in this scenario will be evaluated in this essay which includes corporate social
responsibility (CSR), white collar crimes and cyber law.
Ethical dilemma
In the Cambridge Analytica scandal, the private information of more than 87 million
Facebook users was collected by a third party that was used in the 2016 US Presidential
Elections to support President Donald Trump (Chang, 2018). The key ethical issue is whether
companies should be allowed to collect private data of their users without their consent and
allow third parties to access such information as well. If the technology companies are not
able to protect the data of their users, then whether or not they should be allowed to
collect it in the first place. Another ethical issue is the failure of Facebook to further ensure
the security of its users which resulted in adversely affecting millions of individuals.
Facebook failed to ensure that the security of its users is maintained and their data is not
accessed by third parties for unfair practices (Hern & Pegg, 2018). The key ethical dilemma
raised in this scenario was that the privacy of users was breached due to the actions of
Facebook because it prioritized profitability about data security.
The ethical dilemma arose when Facebook launched a new program for its
developers called Open Graph in 2010. It was a tool which can be used by third party
developed to collect the data of Facebook users who use their application. However, the
major issue with this platform was that developers could also access the data of the friends

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of Facebook users who have not used their application. An application was developed by
Global Science Research called ‘thisisyourdigitallife’ which was launched in 2013 by the
company (Valdez, 2018). This application creates a psychological profile of users who use
the application by giving answers to certain questions. This platform was closed by Facebook
in 2014; however, the data which was accessed by the companies were not recovered back.
In 2015, it was reported that the data of Facebook was used by Cambridge Analytica to
support the presidential campaign of Ted Cruz. Later, in 2017, it was further reported that
around 50 million users were affected by a data breach in which their data was accessed to
find potential Trump supporters in the 2016 US Presidential Elections. It was later reported
by Facebook that more than 87 million users are affected due to this data breach (Chang,
2018).
A committee was established by the government of the United States to entertain
this matter to evaluate whether the laws should be stricter to ensure the privacy of users.
Mark Zuckerberg, CEO, Chairman and the Founder of Facebook, admitted that it was a
mistake of Facebook that the privacy of its users was breached. He also promised to
improve the privacy policies of the company to strengthen the security of its users. The
Information Commissioner’s Office (ICO) in the United Kingdom imposed a fine of £500,000
on Facebook for its failure to protect the data privacy of its users (BBC, 2018). This is the
maximum fine which can be imposed by the ICO; however, this is less than ten minutes
income for Facebook. The shares of the company plummeted after this incident, and they
continue to fall which resulted in causing substantial loss to the shareholders of the
enterprise. After few months, Facebook was involved in another cyber-attack in which the
hackers collected login details of more than 50 million users (Statt, 2018).
Ethical Framework
The first ethical framework is the Utilitarianism ethical theory which is also called
Consequential theory. This theory is a part of normative ethical theory, and it judges the
rightness and wrongness of a scenario based on its consequences (Kubasek, Brenna &
Browne, 2017). This theory focuses on greater good for a greater number of people. As per
this theory, the actions of Facebook are unethical. The company focused on increasing its
profitability when it decided to implement Open Graph platform which shows that it