Hello everyone, we’re the second group that will be presenting about Facebook today,
and the overall topic of our presentation is based on user privacy and what to do about
Facebook in regard to that challenge. We obviously touched on quite a few issues in
the proposal. We mentioned that these issues can be tied in together towards one topic
which is user privacy. How can Facebook tackle that challenge is the question we
have to answer.
Before we get started, we wanted to give a background on what we’ll be covering in
the presentation. First we’ll take a look at Facebook’s updated mission statement and
keep it in mind as the presentation goes along because the more we keep going, going
back to this statement be important. Then a brief background on Facebook and
important moments in their history, we’ll look at what we concluded their main
challenge is. The main challenge, after our original analysis we did in the proposal is
in regards to Cambridge Analytica and how it represents a culmination of issues
facebook has faced. We will then follow up by our brief recommendation. In order to
understand our recommendation, we will then analyze some Facebook’s statistics,
their user growth and social media preferences since the cambridge scandal, their
financial standing, then their possible future.
We’ll then look at some alternatives and finally expand on our recommendation.
(Read the entire mission statement)
In 2018, shortly after the Cambridge Analytica Issue, Mark Zuckerberg explained that
Facebook’s new statement reflected their responsibility within the world and he
believes that Facebook should operate in a way not to just connect the world, but to
bring society together and not divide it.
As most of us already know, Facebook was founded by Zuckerberg when he was a
college student at Harvard and eventually it grew to other universities across the US.
But a significant change happened when the general public was allowed to join the
platform in 2006 and the only constraint was that you had to be over 13 years old.
Several of the things we’re accustomed to today on Facebook such as its “newsfeed”,
the “like” button, and its messaging feature were introduced between 2006 to 2009,
AND in that same time frame it surpassed myspace as the largest social media
Then, a few years after its founding, Facebook had to settle its first federal lawsuit in
the US on privacy and user data.
Moving on, the company had its IPO filing in 2012 and made significant purchases of
other platforms like Instagram, Whatsapp, and Oculus over the next two years.
Most importantly, Facebook has continued to face numerous issues dealing with user
Just to go over our proposal, these were the four main issues we found with Facebook
and it includes Micro-targeting, spread of misinformation, privacy issues, and end of
contracts with marketers. However, we determined that they all share an underlying
theme and that dealt with User Privacy.
I know you may not have remmebered everything so Ill just give a quick rundown of
the 4 issues we discussed last class and why it all comes down to user privacy
Mircotargeting: Microtargeting allows companies and political tools to use
contreversial tools like this in order to place their ads on the platform. Its used by
business to reach targeted customers, and its also used by politcal parties during
election campaigns. They are able to do this by data mining the database of facebook
which has all the users info like, age, gender, political views, user activity etc, likes
SPread of misinformation: This is the “fake” news that can occur out of political ads,
news articles, photos etc. It is shared on facebooks platform but other platforms like
google, twitter have banned it.
Cambridge Analytics scandal: Most of you will probabaly know about this scandal
and we will go deeper into it on the slides. This regards access to private information.
End of contracts with marketers: Facebook earns most of its revenues from third party
marketers who advertise their product on users feeds. Facebook however was looking
to make an opt-out option for users in case they did not want to reciieve these ads.
This would mean less user engagement for markets and considering most of
Facebooks revenues come from marketers, this could be a problem.
We could obviously talka bout all 4 of these issues seperately and we did, and what
we found out is that all these issues have one key theme which is user privacy.
As a result, the main challenge that Facebook faces today is an Ethical and Moral
Issue regarding User Privacy which extends to their personal data that they share on
While we talked about microtargeting issues, and other earlier lawsuits that Facebook
settled in our proposal, the reality is that the Cambridge Analytica data scandal was
the tipping point and it encompassed all of these issues from User privacy, to
microtargeting, to enabling misinformation to spread.
HEre we will expand on the Cambridge Scandal
signed up on the app and gave their consent for the professor to
at-largeheld onto all the data gathered.Facebook
This is just a visual representation of the distribution of users whose privacy was
breached. As you can see, it was a worldwide issue but the biggest victims were in the
The most recent case that came to light is that the Australian government is suing FB
for 529 Billion dollars for violating the country’s privacy laws. Personal Information
of more than 300,000 Australians has been compromised by giving access to this info
to ‘This is your Digital Life’ app who later sold this info. to Cambridge Analytica.
Here is a news article elaborating this further………….
Once the Cambridge scandal become public in 2018, public trust shattered for
Facebook. In one survey there was a 66% drop in trust after the story broke and in
another poll, 40% of users who were surveyed said they cannot trust Facebook with
their private data and information. For reference, the closest were Twitter and
Amazon at 8%. Facebook was clearly at a crossroad here after years of running into
similar user privacy issues.
It was inevitable that Facebook’s future be called into question. There was worldwide
condemnation from politicians while Zuckerberg was forced to testify in the US, they
were constantly on the news, and they were facing massive distrust from the public.
It was speculated and predicted that Facebook could face the same fate as sites such
as myspace (outdated) and hi5 (tried gaming site shutdown). The two most popular
social networking sites in the mid 2000’s. Even though these sites did not have huge
scandals like the Cambridge one, they were both replaced by new platforms, in this
case Facebook. So it was reasonable to assume that Facebook itself could be replaced
within the next ten years as preferences change and as users left the platform due to
its privacy issues.
Before moving on, our recommendation is that despite all of this, Facebook should be
allowed to fix their challenges regarding user data and user privacy. And we will
expand on this later on in the presentation.
As stated previously, Facebook was predicted to head down a similar path to past
social media leaders with a large exodus of users. However, the data does not show
that. In fact, year on year growth for Facebook in 2019 to 2020 showed daily active
users increased and they had almost 2.5 billion active monthly users. They were also
still the most popular social media site to visit, and it remained popular with
marketers and advertisers, which were their main sources of revenue.
To expand, we can see that Facebook’s user base actually grew since the privacy
scandal. And Facebook users account for almost half of internet users, with about
30% of the world population are facebook users.
According to the company, the number of people who logged into its site at least once
a month jumped 9% in 2018 to 2.32 billion people
Despite the scandals, profits are up by almost 40%. Facebook isn't just surviving, it's
thriving. It’s total profit for 2018 was $22 bn, up 39% from the previous year. It
appears that Facebookn is resilient to the turbulence and is growing year by year.
Furthermore, Facebook still remains the top social media preference for users as seen
here. With Youtube being the closest competitor. However, it is important to note that
Facebook owns whatsapp, messenger, and Instagram, and when combined, no other
competitor comes close.
Looking at their finances, Facebook’s revenue actually grew from 2018 by $15 billion
dollars for a total of $70 billion dollars for the fiscal year of 2019. Most of this
revenue comes from advertising with the last quarter of 2019 representing 30% of its
revenue in the entire year of 2019. After expenses, Facebook had a net income of
$18.5 billion, which increased by 16 billion dollars since 2014.
When looking at Facebook’s revenue and net income we can more or less see an
upward curve. While 2018 to 2019 does dip a little bit and levels out, the net income
of $18.5 billion dollars puts Facebook in a strong financial position and their
organizational health is also strong due to user growth and user preferences we just
spoke about. This means that they are in an ideal position going forward and the
chances that they end up like myspace and other sites are slim.
We came to the determination that Facebook’s future includes their ownership of
WhatsApp, Instagram, and oculus. They have already successfully integrated the use
of Instagram to Facebook and WhatsApp continues to be one of the most popular
apps available. In addition, Facebook also bought the Virtual Reality company,
Oculus, known for the Oculus Rift headset. As recently as June 2019, Oculus
outperformed expectations and sold $5 million dollars worth of content within 2
weeks. And Zuckerberg is aiming to make Oculus a market leader in the VR space by
aiming to have 1 billion users of the product over the next couple of years.
In addition, Facebook is also looking to enter into the cryptocurrency industry with
it’s own currency, “Libra”. Even though it does not exist yet, if Facebook were to
successfully integrate Libra into all of it’s platforms, they will create a new
marketspace and change the way transactions work due to their large user base. This
can help facebook, shift away from relying on ad’s for their profit, thus
potentially solving their user privacy problems. But, there is still a possibility we
see the emergence of a wicked problem here, as Libra may be exposed to hackers
and other security issues. But overall, we believe that Facebook’s future is an
Unlike other crypto projects, Facebook already has a humongous user-base and
doesn’t need to start from scratch. They can leverage their 2.38 billion users to adopt
Libra and push it into mainstream acceptance. By comparison, “only” 2.5 million
people own Bitcoin.
2 billion people around the globe don’t have a bank account. Here are some more
stats about the unbanked population:
SE Asia alone has 438 million unbanked people, which is 73% of the entire
population. According to a study done by McKinsey, reaching the unbanked
population in this region could increase its economic contribution from $17 billion to
$52 billion by 2030.
We also decided to look at some proposed alternatives for Facebook to solve their
user privacy issues. The first was federal government regulation both in the US and
Canada. Politicians seemed to want to model regulations based on what the EU’s
general data protection regulation did, which stated companies who violate user
privacy will have to pay 20 million dollars or 4% of its yearly turnover.
However, we see several issues with this. Particularly, where would the regulation
end? Will it only concern user privacy? Or extend to more things on Facebook that
the government decides it does not like?
And will this process be politicized by different political parties when they are in
power? Will Facebook be used as a crutch to blame election results on? This could
also be harmful to innovation. If smaller companies were to unknowingly do
something wrong, they could easily go bankrupt because they may not have financial
resources like Facebook.
Facebook was fined 5 billion dollars and directed to re-structure its approach to user
privacy by the US Federal Trade Commission for its role in the Cambridge Scandal.
However, prominent US politicians and tech journalists believed that the fine should
have been much more.
But we do not agree with this, since this was the largest privacy-related fine ever
imposed by the FTC. The closest fine was only 275 million dollars compared to
facebook’s 5 billion dollar fine. In addition, the FTC made facebook restructure the
company’s approach to privacy, by establishing mechanisms to hold corporate leaders
at Facebook accountable. And these mechanisms and restructuring is subject to strong
ongoing oversight. As a result, we think Facebook’s chance to re-offend has been
What FB did, may not be legally in trouble but it’s definitely unethical. This is what
the Terms of Service on FB say (Read out……). Now by show of hands, how many
of you have actually read the entire Terms n Conditions? Now FB can try and get
away from the court cases by defending themselves by saying that users signed their
rights off for user profiling. But FB very well knows that more than half the
population on FB has never read the Terms. Knowing this, they can take more
rigorous steps like educating users about the Opt-out options.
Now, just to expand on our recommendation, as mentioned, Facebook has restructured its corporate approach to privacy and are subject to meaningful and
ongoing oversight by the FTC.
In addition, Facebook has made the option to opt out of ad’s available to users. And
made an “ad archive” available that facebook users could access.
They have also deleted hundreds of thousands of fake profile or bots than can be used
to spread misinformation by developing and deploying AI tools to help mitigate this.
And they also changed their mission statement to focus on the “community” and
began to engage with the public by running ads apologizing for the breach in trust,
and also creating blogs to listen and speak with users.
Facebook also changed the algorithm of their news feed by prioritizing news that a
user’s family or friend reads. And they also created a team of fact checkers composed
of various news outlets to label news that may be misleading or contain false
And in conclusion to come back where we began the presentation, Facebook changed
its mission statement to include the word “community” and Zuckerberg has since
stated that Facebook’s next focus to be “developing the social infrastructure for
community-for supporting, informing, and keeping the communities safe, for civic
engagement and for inclusion for all.”
Facebook’s Mission Statement
Facebook-Cambridge Analytica Data Scandal
Facebook’s Financial Standing
• Alternative Solutions
• Explanation of Recommendation
FACEBOOK’S MISSION STATEMENT
“Facebook’s mission is to give people the power to build
community and bring the world closer together. People use
Facebook to stay connected with friends and family, to
discover what’s going on in the world, and to share and
express what matters to them.”
Founded in 2004 by Mark Zuckerberg at Harvard
Expanded to other colleges and universities
In 2006 anyone over the age of 13 was allowed to join the platform
“Newsfeed”, “Likes”, and “Instant Messaging” were introduced between
2006 to 2009
Surpassed MySpace in 2009 as the largest social networking site
Facebook settled its first federal lawsuit in US over privacy and user data in
Facebook files for an initial public offering of stock in 2012
Purchased Instagram for $1 billion USD in 2012
Purchased Whatsapp for $19 billion USD in 2014
Acquired Virtual Reality company Oculus for $2.3 billion USD in 2014
2018 Cambridge Analytica Scandal
Facebook has faced numerous accusations relating to privacy issues
• Spread of Misinformation
• Privacy Issues
• Possible End of Contracts with its Marketers
An Ethical and Moral Issue regarding the privacy of Facebook
users and the safety of their personal data
Cambridge Analytica data scandal was the culmination after
similar previous controversies
Australia sues FB for $529 Billion
LOSS OF PUBLIC TRUST
We believe that Facebook should be given the opportunity
to handle and fix their challenges regarding user data and
FACEBOOK STATS (2019 to 2020)
over 2.45 billion
monthly active users
over 7 million
reach of advertising
both for corporations
politicians is 2 billion
DAILY ACTIVE USERS
1.66 billion people log on
every day. A 9% year on
Facebook accounts for
over 45% of monthly
social media visits. More
than any other Social
There are over
120 million fake users
FACEBOOK USER GROWTH
SOCIAL MEDIA USER PREFERENCE
AS OF JANUARY 2020 (in millions)
2019 Q4 REVENUE
Represented a growth of
$15B from 2018
Majority of which were
generated through advertising
2019 NET INCOME
Almost a $16B dollar increase
over 5 years
FACEBOOK’S REVENUE AND NET
• Implementation of Federal Government Regulation in both
the United States and Canada in the mould of the European
Union’s General Data Protection Regulation (GDPR)
• Where does the regulation end?
• Will it be politicized?
• Could be harmful to innovati ...
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