Is Facebook Wagging the Dog?
We have certainly been inundated of late by news & media attention since it was revealed Cambridge Analytica mined information about 87 million people from Facebook. I believe it’s a safe bet Cambridge Analytica is not the only group doing this, and nor is Facebook the only Social Media company at risk to a data breach.
It has been obvious to me for a long time now that any APP downloaded to your Mobile Device, Tablet, Streaming TV, or Computer is collecting Personally Identifiable Information about you. Yes, you, and you are now forever known as a “data subject” and all your habits, your contacts, your search, your location, your travel, your photographs, your children, and everything else you do from all those devices is being collected.
Then all that freshly collected data including your name, address, zip code, telephone number, your geo-location, IP address, mac address, etc. and all the preceding is record matched, by whomever and wherever, with other archived data from voter files, utility bills, credit card information inclusive of purchases, driver license information, government and court records, mortgage information and, so on. Then everything is continuously analyzed on a near real time basis by very sophisticated database engines, and you are served up personalized advertisements and content based on your newly created data subject profile. Your children are being profiled too! Every company with an online presence is doing it, governments are doing it, are you surprised? Well you shouldn’t be! What do you think all those cute little quizzes are about?
So, why should the recent revelations about Cambridge Analytica and Facebook suddenly surprise anyone as it relates to US elections? Really, this is not new news. Why does it matter so much right now? Especially, right now in this time and space as we have slowly been conditioned as a society after much bigger and broader data breaches recently and in years past by Yahoo, Adult Friend Finder, eBay, Equifax, Heartland Payment Systems, & Target to name a few. Also, let’s not forget this really was not a data breach. Facebook allowed all developers to have access to its information. So, again what is really going on here? Every day we all continuously and freely provide our Personally Identifiable Information without any regard to the potential impact of how said information is being used by others to help or hurt us.
The European Union has labeled Data Privacy a Human Rights issue and passed the General Data Protection Regulation (GDPR) which comes into effect May 25, 2018.
Will the US federal government follow a similar course as the European Union? It’s highly doubtful from my perspective that will happen this year, but it may at some point not much further out, but not before if the Democrats get control of Congress after the 2018 mid-term elections. I believe once the GDPR shakes out with various court challenges the fundamental principles of the EU regulation will serve as a model for US regulation as GDPR is a very comprehensive and very well thought out regulation.
Let’s get back to Facebook.
I also find it very interesting and surmise what is now being reported by all the news media outlets is preplanned and well-orchestrated spin by Facebook consultants and strategists. Do you remember the movie “Wag the Dog” with Dustin Hoffman and Robert De Niro? What the masses are being told as fact is just one person’s production. Think about it!
Here is my case in three paragraphs.
We are just about eight weeks ahead of GDPR coming into effect in the European Union. Is this a coincidence? Perhaps it is, but I think it is not. Again, what’s really going on here? I theorize Facebook has conceived, meticulously preplanned, launched, and implanted on the world a very well-orchestrated campaign initiated solely by Facebook top tier executives, strategists, and consultants to distract us all and soften the impact on any potentially destructive downfall to Facebook’s stock valuation. Could it be Facebook executives are simply trying to soften the potential blow back to its market cap, and get ahead of potential negative impact which GDPR may have on its valuation while they are using the veil of Cambridge Analytica, American politics, Russian interference, and the contentious 2017 election of President Trump to hide their true intent?
There is potential Facebook could soon be fined by EU regulators after May 25th for violation of the GDPR and no one is talking about it. No stock market analyst, no one at CNBC, no news or media outlet, legitimate or otherwise, is talking about it. Will the EU regulators immediately impose the maximum 4% fine on Facebook’s Global Revenue simply to set a precedent? Or, will the EU regulators use GDPR to make a quick cash grab from Facebook and set the stage for the EU politicians and authorities to posture in front of the world showing off the intellectual power of the EU and how the EU protects its citizens privacy better than any other nation or region? What about the potential of all the individual and class action civil lawsuits Facebook could be faced with in the event of an EU fine? What if Max Schrems prevails with his existing cases against Facebook in, either or both, the Irish courts or the Austrian courts? How could all these events, individually or combined, potentially devalue Facebook’s stock price in both near and long term?
Guess what, it probably will not matter much because the startling effect and shock of all the above stated outcomes are marginalized because Facebook got out ahead of it by “Wagging the Dog”. Is it a coincidence Facebooks founder Mark Zuckerberg will be in front of Congress next week? Or, is it just part of the well-orchestrated plan the young American and modern day Super Hero will once again prevail by humanizing the Facebook story? Most likely that is the intent rather than sending the lawyers to confront Congress and the political show. Once GDPR comes into effect, or Facebook gets fined, civil lawsuits pop up, or Max Schrems prevails the analysts, the stock pickers, and the pundits can all nod and agree in unison with one another that all is old news, and that news has already “baked-in” to the price of Facebook’s stock price and its valuation. A few months will pass, the dust will settle, and Facebook will be set to run again, and the bull’s will soon be running hard and fast with Facebook. The news pundits will say things like, Facebook will keep chugging along to greater things because it is a great company run by brilliant people and Mark Zuckerberg is well positioned to run for President of the USA in 2023. All I know is that if any company has the tools and resources to pull this off it is Facebook.
There we have it, three paragraphs complete.
I am not a lawyer, stock analyst, nor hold any stock position in Facebook, I am simply a humble business person with a sometimes-vivid imagination and a self-proclaimed expert with a great deal of experience, training, and a team of much smarter people in the field of Data Privacy, Data Security, and Data Networking. In these instances, my role is to foresee risk, mitigate risk, and help create sustainable best business practices for my clients. My theories about Facebook are simply my own, and more for my own personal entertainment and amusement. Time will certainly divulge to me and you whether they are right or wrong. In the meantime, I hope you have also been entertained here, slightly amused, and have a smile on your face.
Here is another theory, much shorter, and not very amusing:
I foresee any US based company, with annualized revenue greater than $1 million and less than $500 million, which touch any EU data subject in any way whatsoever, will have more exposure and risk to GDPR fines, and possible bankruptcy created by insolvency from imposed fines than a much larger entity. Companies with annual revenue greater than $500 million are certainly at risk to GDPR fines, but not insolvency directly due to fines alone. Let’s not discount the potential risk and impact of civil lawsuits which may occur after the regulator fines.
Contact [email protected] if you would like an initial free consultation about your GDPR strategy.