Facebook Data Privacy Scandal: Stakeholder Analysis and Solutions

This essay delves into the Facebook data privacy scandal, examining the ethical issues surrounding the unauthorized harvesting of user data by Cambridge Analytica. It begins with an introduction to data privacy as a fundamental organizational ethical concern, highlighting the scandal's impact on millions of users. The main body includes a stakeholder analysis, identifying the affected parties such as employees, stockholders, users, and advertisers, and assessing the consequences for each. Network mapping is used to classify stakeholders based on their power and interest. A three-level analysis (micro, meso, and macro) provides a comprehensive understanding of the scandal's impact on different levels of social interaction and organization. The essay concludes by suggesting improvements to address the data privacy issues and enhance data security, offering insights into the scandal's implications and potential solutions.

Essay

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Stakeholder Analysis..............................................................................................................1
Network mapping...................................................................................................................3
3 level Analysis......................................................................................................................4
Improving Situation................................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Ethics are one of the most important fundamental base of an organization. Data privacy is
one of the common ethical issue which every organization faces. Data privacy is basically
unauthorized access to the data or inappropriate use of data. This case study is about the data
privacy scandal of Facebook. Almost millions of people uses Facebook and has created their
profile on it. So it is Facebook's main responsibility to keep the data secure. But recently a
Facebook data privacy scandal came into picture. Almost more than 80 million peoples
Facebook data was harvested by a Cambridge Analytica firm so that they can target them for
political advertisements. They were able to gain access of many Facebook users personal data
because of inappropriate data privacy techniques. This raised a question for Facebook about their
data protection approach and disclosure. It was one of the biggest scandal for Facebook as users
personal data was extracted from Facebook and used for a purpose for which they did not give
permission for. Facebook business model is completely based upon collection of users data like
real name of users, their interests likes, their friends, websites they visit, what you speak etc. All
these collected data makes it easy for advertisers or users to target people using it(Tarran., 2018).
On the other hand they want to keep the users' data secure but unfortunately failed in it. It
was explained afterwords that that firm created a quiz app through which they were able to
harvest all the personal data of users. Adding that application to users Facebook account gave
them access to use all the personal information of users, their history, their friends including all
the items that users or their friends liked on Facebook. It was also claimed that this app was able
to access highly personal sensitive attributes like religion, political view, age and many more
information. As it is known that ethical issues especially data privacy ethical issue is one of the
most important issue any company should focus on. In this essay Data privacy ethical issue will
be addressed and analysed and will focus on the data privacy scandal of Facebook. All the
stakeholders involved, ethical principles, three level analysis and solution to improve this will
also be explained(Schneble, Elger and Shaw., 2018).
MAIN BODY
Stakeholder Analysis
Stakeholder Analysis is a simple management and planning tool that is used to analyse
and identify all the Stakeholders of a Company involved. It is the backbone of the company.
Stakeholders are group of persons who are involved with the company and its activities. Every
1

decision that Facebook makes or activities done in Facebook or any effect on Facebook affects
all its Stakeholders.
Organization centred (Hub) Stake holder Analysis
Facebook has many stake holders bifurcated into two types i.e. internal and external
Stakeholders. Internal stake holders includes employees, stockholders and external stakeholders
includes advertisers, users.
Employees are one of the stakeholders of Facebook. They are the main people who are
impacted by companies policies, working environment and how the companies perform.
Companies performance affect their salaries, bonus and all the benefits they get from Facebook.
This data privacy scandal affected Facebook's employees the most as many of them were quitting
their job or were trying to change their department. Most of them were dissatisfied with
Facebook as they thought Company should have focused on data security more(Clark, Maxwell
and Anestaki., 2016).
Stockholders are another type of Stakeholders of Facebook. They are the people who
invest in the company to make profit. They are the people who get affected by the both negative
and positive impacts on Facebook. They want the company to act in a responsible manner for
making profit. Effect of data privacy scandal was also seen on stakeholders, many of them filed a
lawsuit against Facebook as a result of this scandal. Many stakeholders withdraw their shares
from the company.
Users of Facebook are one of the most important stakeholders in the company. They are
the people who can communicate with other people through Facebook. They can organize events
for themselves or others or for the group they belong. Using Facebook they can spread their
message with others. Users were the one who were affect the most due to this ethical issue as
their personal data was harvested and used for a purpose for which they didn't give the
permission. As a result many of the users stopped using Facebook and many filed a complain
against Facebook as their most important data was leaked.
Advertisers are also Facebook's stakeholders. These people pay money to Facebook in
order to spread their message or products to be known by all the users of Facebook. The more
people uses Facebook, more advertisers can spread their message to their viewers. This scandal
affected advertisers as after this scandal Facebook limited advertisers access towards Facebook
2

and its data. Many of them were rejected to use Facebook as a platform for
advertisement(DiStaso, Vafeiadis and Amaral., 2015).
Effect on all the Stakeholders affected Facebook in many ways as Customer base of
Facebook was decreased as many users stopped using their Application or reduced its use as they
have trust issues regarding their data in Facebook. Many of their employees either left of asked
for department change in their company which affected Facebook as Number of employees
working in their Facebook department reduced suddenly and they were facing issues in
management. Many of their stockholders withdrawn their part of shares and many of them file a
lawsuit against them as a result Facebook had to face almost $50 Billion loss in their business.
Advertisers also affected Facebook's net income as many of them were not allowed to advertise
on Facebook and many of their access were limited. This affected the net income of Facebook's
as Advertisers were one of the major source of income for the company. Their stock price
decreased by almost 17% and faced loss of almost $90 billion in their market value. There net
income was also decreased by almost 40% and many of the Facebook sales were decreased.
Network mapping
Keep Satisfied: Users of Facebook come under this category as they have high power over the
company to influence their decision and low interest in its business as compared to others.
3
Figure 1: Network mapping
Source: Network Mapping.2018

Monitor( Minimum efforts): Advertisers come under this category. As they have very low
interest in companies operations and have low power as they cannot influence organizations
decision.
Engage closely and influence Activity: Stockholders are the one who have high interest and
high power in the company as they make profit from them and can influence their decisions.
Keep informed: All the employees of Facebook will come under this category. As they have
high interest in the company but low power.
3 level Analysis
Facebook is one of the most commonly used social networking websites or application
used worldwide. It is a platform which is used by users to interact with each other, share their
point of view freely with others. But as it has many benefits it also has some disadvantages like
security of personal data i.e. their personal information can be misused for some other purpose
for which users did not give permission. Impact of Facebook is mostly seen on news as it is one
of the most important source of use, interaction as people can communicate and interact with
each other more easily, political landscape as it has increased awareness and organizations of
politics, learning as it plays a vital role in forecasting literacy and in marketing as it is a main
platform for many organizations to do marketing of their products or services(Daniels, 2016).
Through Social networking analysis of Facebook their behaviour and structure can easily be
understood. Through 3 level analysis i.e. Micro, Meso and Macro Analysis.
Micro level Meso level Macro Level
It is the smallest level of
analysis. It is concern with
daily activities of people. It
involves direct interaction with
the individual. It is sub divided
into four levels.
Dyadic level: it is a social
relationship between two
individual. It normally
concentrates on factors like
social equity,tendencies
This is an analysis level which
focusses on groups or within
the groups instead of
individuals . This level
addresses social group issues.
In this level all the groups
created on Facebook are
considered. It is further
divided into two levels i.e.
Organizations: these are kind
of social groups which
this level involves advocacy
and intervention on large scale
which affects the entire state,
community or country. It helps
their clients by intervening at
large scale which may be
behind the reach of an
individual. This level may not
be even be recognizable as
social work. It can be said that
it is interaction between
4

towards mutuality or
reciprocity etc. this scandal
affected the relationship
between two individual as
most of them were concern
with their data security.
Triadic Level: this level shows
relationship between three
individuals.
Actor level: In the social
networking sites the smallest
unit of analysis is Actor. It
focusses on relationship
strength, isolation and many
more. Such type of analysis is
mostly used at psychological
level.
Sub-set level: it mainly
focuses on reachability and
distance and other
behaviours(Gilberthorpe and
Papyrakis.,2015).
This scandal had a
huge diverse effect at micro
level. It affected the
relationship between
individual as it involves social
interaction with individuals.
People who used that political
application faced data
harvesting issue and as a
distributes there tasks
according to a common goal.
Organizations can either be
inter or intra organizational
depending upon their type of
relationship like formal or
informal. Intra organizational
groups often consist of more
level of analysis.
Scale free network: it is
a network whose distribution
degree follows a power law. It
mostly consists of analytical
tools, theories used to create
them with some common
characteristics.
Facebook data security
Scandal didn't have a direct
impact on them but an indirect
impact as users whose data
were harvested their group
details were also used i.e. the
group in which they were part
of(Niskanen, Louhelainen and
Hirvonen., 2016).
nations or comparison between
nations. This level workers
many be involved to make
laws to help government for
raising funds to help
communities.
With this scandal
mostly micro level and meso
level were affected. There was
no effect or least effect Macro
level as data harvesting was
only done of users who used
their application. All the
personal data, friend list,
groups they were part of etc.
data was harvested and used
by Cambridge Analytica firm.
Macro level didn't have much
effect of this scandal.
5

result most of them stopped
using their application or
stopped interacting with any
other application linked with
Facebook. This was one of the
biggest scandal of Facebook
happened at micro level.
Improving Situation
This scandal was a very unpleasant scandal for Facebook and shakes the whole privacy
world because this scandal happened with increased security, privacy regulation and as a result
after this they vowed to make series of changes in collection of users data, banning some
external applications so that users are given more access and data security is increased. Company
redesigned and made some changes in the privacy setting of the website and
application(Vaidhyanathan., 2018). There was also a movement (delete Facebook) which made
company to take strict actions to secure users' data and avoid any other outsiders access to the
customers' data. They took many measures, frameworks to secure users' data and limit access of
their personal information so that individual has more control on their data as data is the most
important thing in Facebook because of which they make revenue. There whole business model
is based on this. It was there first and the foremost priority to rectify this situation for their as
well as users benefit.
First thing they did was to alert people whose data was harvested and misused through
that application and alerted them to change their passwords, and privacy settings. They provided
them a helping centre tool and page which informed them how and when there data might have
been misused. They reviewed all the applications and websites who has access to large amount
of data and were using it through this platform and all the applications with suspicious activities.
They limited their access to users data and blocked all the applications with suspicious activities
so that users' data was not compromised.
They also made a change in their policy that if any user haven't used an application in last
three months then they will automatically turn off access to users data so that users' information
is secured(Facebook and Cambridge Analytica.,2018.). They also changed their login system and
6

data so that any application can only see users profile photo, name and email address until and
unless that particular application does not go through any review process further. No application
will be able to access unnecessary Personal information of users from their personal profile or
groups or friend list. Further they gave users the access to decide what information can be
accessed by any application they are using on Facebook so that they are aware about the data that
can be used by the applications.
They made a bug bounty program through which people can get rewarded if they report
or found any application or developer who is using peoples data incorrectly. They also updated
there general data protection law and regulations and users data protection law to reduce data
breech, cyber attacks, questionable data sharing for both users and company. They completely
redesigned their setting menu especially for mobile application. They made a new layout which
focusses on settings in one location instead of 20 different screens. Facebook centralized there
privacy setting i.e. users can get information about all the application they are using linked to
there account or applications they used to use linked to their profile along with different ways to
delete those applications and how to stop them from using the data.
Facebook also added an option for users that weather anyone can download their post
from their account or not from their platform and also weather they want to keep the data or
delete it from the site(Facebook data privacy scandal.,2018). They also gave users access to
control weather they want to share their friend list with others or any application or not. If they
do not want to share there friend list with any application or other users they can control it from
privacy settings and that information will not be available to others.
Facebook also disable a feature on their application to search someone through there email
address as they found it malicious.
CONCLUSION
From the above essay it can be summarized that Data harvesting scandal was one of the
biggest data privacy ethical issue faced by Facebook. They had to suffer financially, legally
because of this scandal and as a result there customer database decreased, they had to face
lawsuits filed against them, there net worth decreased as well as there market share was also
decreased. There data security methods and techniques were also questioned. All of there
Stakeholders were affected because of this like many employees either resigned, or asked to
change there department, Stockholders either backed out or filed a lawsuit against them, many
7

users personal and sensitive data was harvested and also many advertisers were blocked from
using users' data or limited there access towards users data without review process. In the above
essay three level analysis of Facebook is done ( Micro, Meso and Macro level analysis) to
understand the impact of scandal on type of users who were affected. At last different
Frameworks, measures are explained i.e. how Facebook tried to overcome that ethical issue of
data breech and what changes they made in their privacy settings, users data access, in their
policies, laws and rules so that they can secure their users data and can assure them that this type
of any ethical issue will not happen again. They had made many changes in their policies to
overcome their data breech scandal so that this incident does not happen again. They can also
introduce option for users to choose whether they want to save their personal information on
their cloud or not so that if any such indecent happens again then at least there personal
information can remain secure.
8

REFERENCES
Books and Journals
Clark, A.F., Maxwell, S.P. and Anestaki, A., 2016. Bach, Beethoven, and benefactors: Facebook
engagement between symphonies and their stakeholders. International Journal of
Nonprofit and Voluntary Sector Marketing. 21(2). pp.96-108.
Daniels, A.M., 2016. The power of emotions: engaging nonprofit stakeholders within Facebook.
DiStaso, M.W., Vafeiadis, M. and Amaral, C., 2015. Managing a health crisis on Facebook:
How the response strategies of apology, sympathy, and information influence public
relations. Public Relations Review. 41(2). pp.222-231.
Gilberthorpe, E. and Papyrakis, E., 2015. The extractive industries and development: The
resource curse at the micro, meso and macro levels. The extractive industries and
society. 2(2). pp.381-390.
Niskanen, T., Louhelainen, K. and Hirvonen, M.L., 2016. A systems thinking approach of
occupational safety and health applied in the micro-, meso-and macro-levels: A Finnish
survey. Safety science. 82. pp.212-227.
Schneble, C.O., Elger, B.S. and Shaw, D., 2018. The Cambridge Analytica affair and Internet‐
mediated research. EMBO reports. 19(8). p.e46579.
Tarran, B., 2018. What can we learn from the Facebook—Cambridge Analytica
scandal?. Significance. 15(3). pp.4-5.
Vaidhyanathan, S., 2018. Antisocial Media: How Facebook Disconnects Us and Undermines
Democracy. Oxford University Press.
Online
Facebook and Cambridge Analytica.2018.[Pdf].Available Through
:-<http://eprints.lse.ac.uk/88964/1/businessreview-2018-03-22-facebook-and-cambridge-
analytica-let-this.pdf>
Facebook data privacy scandal.2018. [Online]. Available Through
:-<https://www.techrepublic.com/article/facebook-data-privacy-scandal-a-cheat-sheet/>
Network Mapping.2018.[Online]. Available through:- <http://www.uniteforsight.org/evaluation-
course/module14>
9