A UK Privacy Watchdog Is Searching Cambridge Analytica’s Office As Its Scandal Fallout Deepens

by Alex Kantrowitz on March 23, 2018

Daniel Leal-olivas / AFP / Getty Images

Cambridge Analytica is reeling in the wake of a scandal in which a whistleblower alleged the political analytics firm illicitly obtained Facebook data from more than 50 million profiles, and used this information for its work on the 2016 US presidential election.

On Friday, the fallout continued in the UK as the Information Commissioner’s Office, a user privacy watchdog, was granted a warrant to search the company's offices by a British High Court judge.

“We’re pleased with the decision of the judge and we plan to execute the warrant shortly,” the ICO said in a tweet before entering Cambridge Analytica's offices. “This is just one part of a larger investigation into the use of personal data for political purposes and we will now need time to collect and consider the evidence.”

Meanwhile, Cambridge Analytica was in damage control mode on Friday. The company's acting CEO and former Chief Data Officer, Alexander Tayler, emailed a message to the press claiming the company did not use the illicitly obtained Facebook data during the 2016 US elections. He also sought to cast doubt on the veracity of whistleblower Chris Wylie's claims.

Here's the full letter:

23 Mar 2018, by Cambridge Analytica, London

As a data scientist I deeply believe in fairness and transparency in
the way data is collected and processed. I am sorry that in 2014 SCL
Elections (an affiliate of Cambridge Analytica) licensed Facebook data
and derivatives from a research company (GSR) that had not received
consent from most respondents. The company believed that the data had
been obtained in line with Facebook’s terms of service and data
protection laws.

I became Chief Data Officer for Cambridge Analytica in October 2015.
Shortly after, Facebook requested that we delete the data. We
immediately deleted the raw data from our file server, and began the
process of searching for and removing any of its derivatives in our
system. When Facebook sought further assurances a year ago, we carried
out an internal audit to make sure that all the data, all derivatives
and backups had been deleted, and gave Facebook a certificate to this
effect. Please can I be absolutely clear: we did not use any GSR data
in the work we did in the 2016 US presidential election.

We are now undertaking an independent third-party audit to verify that
we do not hold any GSR data. We have been in touch with the UK
Information Commissioner’s Office (ICO) since February 2017, when we
hosted its team in our London office to provide total transparency on
the data we hold, how we process it, and the legal basis for us
processing it. I want to make sure we remain committed to helping the
ICO in their investigations.

The recent media frenzy has been distressing. The source of
allegations against the company is not a whistleblower or a founder of
the company. Christopher Wylie was a part-time contractor who left in
July 2014 and has no direct knowledge of our work or practices since
that date. He was at the company for less than a year, after which he
was made the subject of restraining undertakings to prevent his misuse
of the company's intellectual property while attempting to set up his
own rival firm.

Cambridge Analytica was formed in 2013, out of a much older company
called SCL Elections. Cambridge Analytica is a data science
consultancy and marketing agency which does undertake some political
work in the US, while SCL Elections is a consultancy focusing on
non-US political campaigns. We take the disturbing recent allegations
of unethical practices in our non-US political business very
seriously. The Board has launched a full and independent investigation
into SCL Elections’ past practices, and its findings will be made
available in due course.

As anyone who is familiar with our staff and work can testify, we in
no way resemble the politically-motivated and unethical company that
some have sought to portray. Our staff are a talented, diverse and
vibrant group of people.

I believe that we should all have more control over our data, and
there should be more transparency over how and when it is used. I
welcome Europe's new data protection laws (GDPR). There are very good
reasons for updating current data regulations, which date back years
to a very different time. From giving everyone more protection, to
promoting a more equal privacy landscape, these changes will be good
for the industry as a whole.


Originally Posted By BuzzFeed - Tech


Why Nothing Is Going To Happen To Facebook Or Mark Zuckerberg

by Alex Kantrowitz on March 23, 2018

Stephen Lam / Reuters

As Facebook’s Cambridge Analytica scandal spiraled into chaos this week, a frantic hail of notes from Wall Street analysts reached investor inboxes with a clear and definitive directive: Buy.

“We view the medium-term and long-term risk-reward on the shares as downright compelling,” said RBC analyst Mark Mahaney. “We would urge investors to not lose sight of the areas where FB is doing very well,” said Wells Fargo analysts Ken Sena and Peter Stabler. “We see the current selloff as a buying opportunity,” said Oppenheimer senior analyst Jason Helfstein. Though the company’s stock did take a beating this week, its market cap is still approximately $480 billion, up significantly over the past year.

With Wall Street leading the way, the four entities with the strongest ability to cause long-term damage to Facebook in response to revelations that Cambridge Analytica illicitly used 50 million of its users’ data for political purposes didn’t seem ready to do so: Analysts told investors to buy the dip. Advertisers kept spending. Legislators continued to sit on their hands while a basic ad transparency bill rotted in Congress. And though users posted #DeleteFacebook en masse, Facebook actually rose to 8th place from 12th in the iOS mobile App Store since the day before the Cambridge Analytica news broke. It’s holding steady on Android, too.

After examining whether first-time US installs of Facebook were dropping, Randy Nelson, head of mobile insights at app analytics company SensorTower, told BuzzFeed News: “The short answer is no.” App Store rankings don't directly reflect user numbers, but they're a good of indicator of interest.

Amid a weeklong reaming from legislators, press, and public, Facebook relied on a playbook that’s worked effectively during its past crises, be it in failing to rein in fake news, or subversive foreign activity, or discriminatory ad targeting: The company first downplays the problem, then hunkers down as outrage builds. When it can no longer ignore the outrage, it speaks up and apologizes, rolls out some fixes, and returns to normal. Facebook has had practice at this sort of thing, and it’s gotten good at it.

The speak-up-and-apologize stage took place Wednesday, when CEO Mark Zuckerberg gave a flurry of interviews and apologized. And when the dust settled, Facebook found itself in a familiar place: on the road back to the status quo. “I don’t see any massive blowback for this,” veteran Silicon Valley tech entrepreneur Chris Tolles told BuzzFeed News. “Even the people up in arms don’t seem to be doing much.”

Members of Congress, some of the most outraged during this scandal, used the moment to demand Zuckerberg testify in Washington, but so far, none have said they would subpoena him if necessary. Many expressed interest in having Zuckerberg testify during hearings last fall when Facebook, Google, and Twitter were called in to discuss election meddling via their platforms. But without a subpoena, the legislators got the company’s lawyers. On Wednesday, Zuckerberg said he’d be open to testifying “if it’s the right thing to do.” It’s still his choice.

And what of last year’s Honest Ads Act, an ad transparency bill of the variety Zuckerberg said he’d love to see pass? It’s stalled in the Senate, with only 18 cosponsors, including just one Republican, Senator John McCain. “It’s stuck on the political realities of a polarized moment,” Sunlight Foundation deputy director Alex Howard, who helped draft the bill, told BuzzFeed News. Howard said requiring disclosure of who’s paying for digital ads is so polarized that the issue reminds him of the impasse on climate change.

It remains to be seen whether the US Federal Trade Commission will fine Facebook for violating the consent decree, which requires user data only be used in ways they agree to. But even the European Union’s record $2.7 billion fine levied on Google for antitrust abuses hasn’t significantly changed the search giant’s business. The less toothy FTC isn’t likely to force a shift in Facebook’s modus operandi either, and the company seems to know it. “We believe we can operate our business with our current business model,” Facebook COO Sheryl Sandberg said in a CNBC interview Thursday.

Advertisers, able to express displeasure by directing their dollars elsewhere, aren’t doing so either. No blue chip advertiser has announced a spending pause on Facebook as a result of the Cambridge Analytica scandal. And a Times of London article claiming advertisers were threatening to “quit Facebook” over the scandal couldn’t get a single one to say so on record. So far the highest-profile advertiser to say it’s pulling its ads is Mozilla, a nonprofit.

“As long as the ROI is there, I don't think advertisers will flee,” Aaron Goldman, chief marketing officer of media technology company 4C Insights, told BuzzFeed News. Over the past week, 4C’s data showed advertiser spend on Facebook remained steady, Goldman said.

In situations of spiraling crisis, company boards sometimes examine whether the CEO is still fit for the job. Uber’s board, for instance, helped spur the departure of embattled chief executive Travis Kalanick last summer. But no such scenario will take place at Facebook. Due to a stock structure that gives Mark Zuckerberg unchecked voting power, he effectively can’t be removed.

It's not like the Facebook board was planning to recommend such steps anyway. “Mark and Sheryl know how serious this situation is and are working with the rest of Facebook leadership to build stronger user protections,” Sue Desmond-Hellmann, lead director on Facebook's board, told BuzzFeed News on Wednesday. “They have built the company and our business and are instrumental to its future.”

Facebook, which did not respond to a request for comment, has engaged in world-class damage control. And as long as it hews to the script, severe repercussions from this scandal appear unlikely, at least in the immediate future.

Reflecting on what happens from here, Tolles said Facebook will eventually fall — not because of outrage and regulation, but rather the natural cycle of the tech business. “It will be time and markets — it’s never been the government,” he said. “I don’t think we’ve ended history with Facebook.”

Originally Posted By BuzzFeed - Tech