Watching Facebook founder and CEO Mark Zuckerberg apologise this week for a scandal of global magnitude, caused in great part by his company’s failure to secure the personal information of at least 50 million users, made it crystal clear that very little will change once the tide of anger recedes. The Cambridge Analytica scandal is the latest in a series of dangerous data breaches that promise to become the norm of our times, as interconnectivity continues to grow and data-mining tools become more sophisticated. With Europe taking the lead on digital regulation, ready to set into motion a new digital privacy law whilst debating digital copyright reform, what has become clear is that Silicon Valley’s giants, particularly Google and Facebook, are sitting on the vastest trove of personal data ever amassed, meaning that not only have they come to dominate the digital media market, they have also become key players in a global war of culture and influence. Which in turn puts into context the strategic importance of both companies – along with Apple, Amazon, and Microsoft, and others – and the power wielded by the United States and its companies.
Last week in this space we noted that the forward intelligence capacities available to marketers, hackers and spies – due the widespread use of smartphones, search engines, and social media – is more powerful than the physical threat of murder using nerve agents. The implosion of Cambridge Analytica, the firm credited with designing and flawlessly executing Donald Trump’s digital data and advertising campaign, illustrated our point. Taking advantage of the huge data-gathering opportunity provided by Facebook, the company formerly run by Alexander Nix gained access to personal information of at least 50 million people, using the data to generate specific psychographic profiles of potential voters. With that, and through micro-segmentation on Google, SnapChat, Twitter, Facebook and YouTube, they served up 10,000 different ads through a strategy of “persuasion digital marketing,” swaying potential voters and helping the Trump campaign pull an incredible upset. According to the company’s former CEO, they were also active in recent Argentine elections, something the Mauricio Macri Administration has denied to reporters. Their failure to speak on the record about Cambridge Analytics only generates more suspicions. (My take on the case, in Spanish, can be found here: https://tinyurl.com/fontevecchia).
Cambridge Analytica and Nix have fallen into disgrace for doing much the same things we applauded the Barack Obama and Mauricio Macri campaigns for in their respective underdog electoral victories. The difference today is that we have Trump and the likes of Russian Premier Vladimir Putin at the helm of cutting-edge technology, and that Nix was filmed offering a prospective client to send prostitutes to an opponent’s home, and then filming it. The irony of Nix being caught on a hidden camera while offering up a centuries-old technique (entrapment and extortion using Eastern European escorts) pushes the sophistication of today’s Big Data techniques out of the spotlight.
Yet data, and how it is used, is probably the defining concept of our times. The scary possibility that the Steve Bannons of the world are exploiting weak data protection policies by technology companies in order to reverse-engineer our brains and then manipulate us — and therefore the democratic process — into making important decisions without being fully aware of them is a reality that will not go away. Indeed, Google and Facebook have built their business models on the capacity of algorithms to detect and predict our preferences, emotions, and fears, mainly in order to keep users logged on for longer in order to sell more ads.
The public outcry at the situation is a game-changer for Silicon Valley, which was essentially built on access to users’ personal data. The introspective Mark Zuckerberg was forced to face the music, giving interviews to the likes of CNN and Wired magazine, where he expressed repentance for what happened, promising to be more careful with people’s data next time. While Google’s founders, Larry Page and Sergey Brin, have remained quiet, the company has proactively lobbied regulators on both sides of the Atlantic, while holding out an olive branch to the media.
Unfortunately, though, all of this comes down to regulation, and the European Union is taking the lead, much to Silicon Valley’s disappointment. In the United States, Google, Facebook, et al. face a more benevolent regulatory environment which generally puts business interests first. The companies are also valuable strategically from a military and intelligence perspective (which is why they’ve had such a hard time in places like China). The EU Parliament has signed the General Data Protection Regulation (GDPR), which goes into power this May. GDPR is designed to put the consumer first, protecting personal data at every step while giving the power back to the individual. Tech giants will be forced to use a variety of methods to protect personal data (pseudonymisation, anonymization, encription), hire a data protection officer, and develop a dashboard for consumers to control, monitor, check, and delete data, if so inclined. Violations will be aggressively pursued, with fines that go up to four percent of global revenues. Given the scope of the policies, and the economic importance of the EU, the impact will be felt globally. At the same time, the European Commission is debating the future of digital copyright, which could force companies like Google and Facebook to pay publishers for using their content. While Google has intensely lobbied against the proposed rules, which include neighbouring or ancillary copyright — allowing publishers to charge search engines and social networks for displaying their content — the EU is intent on going forward in order to create a working copyright market. The regulation also looks to put the onus of content monitors to avoid copyright infringement on platforms, not content creators. As the furore over the Cambridge Analytica case dies down, don’t expect anything more than superficial fixes to systemic problems that will persist. Yet, GDPR and the future EU copyright law have the potential to generate a new digital ecosystem where user data is strictly protected and content creators gain real leverage over digital platforms. Whether this will lead to a closing up of the web remains to be seen.
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