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Did Zuckerberg Just Destroy Any Hope Of Recovery For Facebook?

Did Zuckerberg Just Destroy Any Hope Of Recovery For Facebook?

The last week has seen the biggest crisis in Facebook’s history, and Mark Zuckerberg’s silence may prove to be more damning for the company than the news that precipitated it. The question now is, can the social media giant recover?

The New York Times broke the story last Saturday that Facebook (NASDAQ: FB) exposed the data on 50 million Facebook users to voter-profiling firm Cambridge Analytica in 2015 without users’ permission allowing Cambridge Analytica, which worked for the Trump campaign during the 2016 election, to exploit the social media activity of a huge part of the American electorate.

Cambridge Analytica did this by working with Aleksandr Kogan, a Russian American who worked at the University of Cambridge. Kogan built a Facebook app that was a quiz. That quiz not only collected data from the people who took it, but also exposed a loophole in the Facebook API that allowed it to collect the Facebook friends of the quiz takers as well.

Facebook prohibited the selling of the data collected via this method, but Cambridge Analytica sold the data anyway to the Trump campaign, and may have also kept it despite promising Facebook it would delete the data it had received.

As the scandal unfolded, someone was conspicuously absent. Facebook CEO Mark Zuckerberg.

For five days after the story broke, Facebook had been lambasted by critics, the stock market, and regulators, but Zuckerberg had stayed silent.

He broke his silence Wednesday afternoon in a personal Facebook post that laid out a few of the solutions he plans to introduce before starting an apology tour with the press.

“I started Facebook, and at the end of the day I’m responsible for what happens on our platform,” Zuckerberg wrote in his statement Wednesday.

But the apology seems a little too little and a little too late.

Zuckerberg didn’t mention in his post why it took five days to respond to the scandal nor why when the breach occurred over 2 years ago, users still had not been informed that their data had been compromised. He accepted what he called “a breach of trust between Facebook and the people who share their data with us and expect us to protect it.”

This type of crisis is familiar to Facebook, this isn’t the first time it has had data privacy issues in its 14 year history. But this time, the data leakage didn’t help sell mayonnaise, but instead was exploited for political gain. It also made made it look as if Facebook’s data controls were lax and that its executives simply didn’t care. This is bigger than fake news and Russian trolls.

Facebook’s stock has dropped by more than 20 points, erasing tens of billions of dollars in market cap. Users have started a #deleteFacebook campaign. Members of Congress have formally called on Zuckerberg to go to Washington to testify. The FTC is investigating. There have been four lawsuits filed in the past week—including a class action suit by users, and a lawsuit by shareholders against the company, and CEO Mark Zuckerberg—against Facebook. Advertisers are pulling their ads off Facebook and Facebook-owned Instagram.

This scandal has certainly damaged Facebook’s and Zuckerberg’s image, and has opened a larger debate about how users can trust the company with their data. It would be one thing if this were a new error, but the company has known about it for more than 2 years and are only now acknowledging they made a mistake.

Facebook has survived every previous scandal because of its addictiveness, because Wall Street was making so much money from all of the things advertisers could do with the data, and because it has remained largely unregulated in its home market. But can it prevail when users no longer trust the company with their personal data, and everyone from users to shareholders to advertisers to Congress is coming with pitchforks?

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