Valentina Bertozzi, Daniel Durkin, Isabelle Ringnes

Facebook Case Study, Media Ethics 2012

SITUATION

    “Trust is the cornerstone of our business,”

proclaims Sheryl Sandberg, Facebook’s confident COO, to a skeptical Charlie Rose in an October 2012 interview. This particular interview addresses several questionable tactics employed by Facebook, most notably as they relate to advertising revenue and sourcing information from users. The interview introduces an even more interesting set of questions about Facebook’s relationship to users. As their user base expands, so does the potential for more revenue.

    With one billion monthly active users, it's no surprise that Facebook has changed its advertising tactics. Facebook has quickly grown from a college student’s experiment to a multi-billion dollar enterprise that has ignited a social revolution. During Facebook’s infancy, the user was required to to have a college e-mail address to join the inclusive social network initially targeted to ivy leaguers. Soon enough, everyone was able to join and the floodgates opened up wide. Facebook Executives and Mark Zuckerberg saw an opportunity for vast marketing opportunities. After years of experimentation and website overhauls, Facebook is still perfecting their business model and advertising practices.

    As long as Facebook remains a free service, their advertisements will keep them afloat. Facebook’s unique advantage is that they hold the key for optimum advertising; they know their audience, what they like, where they shop, what they eat, when they watch TV and when they volunteer. Facebook then transforms this data through a detailed algorithm and can custom-tailor advertisements to suit a user’s exact interests.  Some users are understandably upset at this apparent invasion of privacy and Facebook’s lack of corporate transparency. As Facebook’s audience grows every day, it is unclear whether their tactics will see any changes in the foreseeable future. The three-way conflict between Facebook’s Privacy Policy, the Individual User and the Advertisers is a potentially damaging infringement of its massive user base’s personal information that could arguably be more helpful than it appears.

Facebook, Inc: How “private” is private?

    As a fairly young corporation, Facebook has experienced a roller coaster ride of changes and adaptations in its infantile state. More surprisingly, Facebook has repeatedly changed its privacy policy as it pleases and has rarely given the public advance notice. Users are typically resistant to changes, often threatening to boycott the site in their status updates. Yet, they continue to log in every day and eventually accept the inevitable change. Despite public announcements (usually via e-mail), some users remain unaware of Facebook's ever-changing landscape and continue to decry Facebook's somewhat questionable practices.

    Advertisers are now privy to every user's information. For them, Facebook is a resource to get to the root of a product or service’s audience. They can observe trends and conversations in real time and custom-tailor their ads to provide the best user experience possible. From the other end of the spectrum, this practice continues to feel invasive and unwelcome for some users. At its core, Facebook attempts to do what’s best for the user when they consider their interface design. At the end of the day, however, they must now also please their share holders and prove that the social revolution is a profitable one.

The User: Where do I fit in?

    As a personal user, it is initially off-putting to imagine the scope of Facebook’s tactics in exposing my personal information. Despite one's agreement to its terms and conditions, it seems deceptive to so freely auction off one's likes, interests and personal habits. When one elects to join Facebook, they are asked a series of standard questions - Name, Gender, Birthday, E-mail Address.  Additionally, one must check off that the terms and conditions are acceptable.  In our modern digital landscape, this is as good as a legal contract.  One cannot retroactively agree to different terms.  Despite one's convictions about the policy or changes in policy, Facebook’s business model is dependent on advertisers, their primary source for revenue.  While the user experience is always a priority, profit margins are at the forefront much like any publicly traded enterprise.  Additionally, Facebook diligently alerts users about privacy policy changes via e-mail, albeit in sporadic, sudden and seemingly random intervals. These practices beg the questions- does Facebook see users as real people or simply data?

Advertisers: We’re in the Money

    For some, Facebook's tactics are subversive, deceptive and perverse. From an alternative perspective, Facebook's custom-tailored ads are helpful and informative. Moreover, one could argue that Facebook Users must be more accountable for the terms to which they agree. For advertisers, Facebook holds the key to reaching users where they need it most.  Facebook's model for providing advertisers with the most accurate information on its users will guarantee the best return on investment for the products they hope will gain widespread attention.  While it may seem unethical, this provides the user with an optimized advertising experience as opposed to universally generated ads, such as Hulu or Youtube. By agreeing to Facebook's terms, they accept the possibility of this alleged transgression.

What Next?

    Facebook's intentions appear to be well-formed; they are aiming to create a personalized advertising experience unmatched by other social sites and they are succeeding fairly well. They maintain strict advertising guidelines and do not covertly attempt to seduce its massive user base. However, their lack of transparency is threatening their strategic choice to provide a uniquely tailored ad experience. Despite their attempt to alert their user base, most are quick to ignore an e-mail alert or decry any new changes. Users are quick to react and are becoming smarter every day; they know how they value their privacy and they expect it to be upheld. Before their user base implodes in the slightest, Facebook may need to rethink its advertising tactics and more importantly, how to increase the public's awareness of these tactics.

VALUES:

To move fast:

    Facebook opts to move fast in a quickly changing and aspiring global environment. They intend to build, develop and learn faster than competing companies to keep a constant edge, and believe that making bold decisions is better even though it means occasionally being wrong. Facebook views other Internet businesses as too risk averse and afraid of breaking things, and as a result they miss opportunities and grow too slowly. Facebook believes that if they are not breaking things, they are not moving fast enough

. Facebook’s motivation to continuously develop and modify privacy policies is to achieve a more engaging experience and open global community. They believe that this value is mutually beneficial to everyone involved in the social site, be it users, advertisers, corporations, shareholders and Facebook itself. Although moving fast enables Facebook to sustain its image as a social empire, it requires their attention to the downsides of continuous privacy changes to avoid the threat of users doubting their intentions and consequently emigrating to other social networking platforms that value privacy more than expanding and risk-taking at any price.

    Helping users share expressive and relevant content are values included in Facebook’s policies. Even though Facebook undoubtedly facilitates the way we use the Internet and help spread messages, some users abuse the site to promote hate speech, racism and rape. As a result, some advertisers have reacted negatively when realizing that their product may have been promoted in association to these tendencies.

    Building and maintaining trust is vital to Facebook’s existence, although the company in regards to this value has faced massive critique. Facebook first altered their terms of use in February 2009 claiming that even though users removed content from the site, they withheld the right to retain archived copies of users content. The new license granted that Facebook could freely use names, likeness and image in promotions in external advertising. Before the changes this clause included the promise that the license would automatically expire if a user chose to remove content, but without further notice Facebook removed this statement ultimately granting the company indefinite use of private information, regardless of whether the user had previously deleted it. These changes resulted in worldwide Internet debate and formal complaints from the Federal Trade Commission. Facebook’s founder Mark Zuckerberg eventually complied with users demand to permanently delete information reassuring users that Facebook’s philosophy is “that people own their information and control who they share it with”

. He further guaranteed that future changes would be written clearly and open to discussion with users.

Respecting privacy:

    Facebook promotes the company’s complete transparency in regards to what amount of users information is publicly shared. Facebook guarantees that information you share with them, stays with them and that users should trust their information with the company. However, substantial user policy concern has occurred as a result of the ongoing application and interface changes, generally enabled by default and without user notification. Founder Mark Zuckerberg created a blog in 2009 which purpose was to update users on the progresses in terms of use. Zuckerberg proposed Facebook’s statements of right and responsibilities in addition to disclosing the company’s principles and also enabling users to vote on privacy changes before they are officially released. "We decided we needed to do things differently and so we're going to develop new policies that will govern our system from the ground up in an open and transparent way", he stated acknowledging the fact that users need to adjust and familiarize with products before they can adequately show support. The policy’s included Facebook intention to never “mislead, confuse, defraud or surprise users”. The voting policy was recently abandoned by Facebook, whom notified users via email and caused great opposition and protests on the site and in the media.

In November 2009, Facebook issued a proposed new privacy policy, and adopted it unaltered one month later together with many new privacy settings. The new policy’s declared certain information that users had explicitly chosen to keep private such as "lists of friends", gender of partner of interest, relationship status, family relations and profile photos, to be defaulted "publicly available"- even to those not registered on Facebook. The changes were executed without informing users and the option to make the information private again was removed. The changes were widely described in the media as a “great betrayal”, and were met with protests from privacy organizations such as the Electronic Frontier Foundation, American Civil Liberties Union and several of Facebook’s more privacy stringent users. They criticized the company for continuously reducing users privacy and pushing users to remove privacy protection without their consent. At the time, Zuckerberg defended the changes by confidently stating "we decided that these would be the social norms now and we just went for it"

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    Facebook claims to protect user privacy by offering full corporate transparency, and pledge to not share user information with third party users without users consent. In January 2011 EPIC filed a complaint claiming that Facebook's new policy of sharing users' home address and mobile phone information with third-party developers were "misleading and failed to provide users clear and privacy protections", particularly for children under age 18

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    In 2008, The New York Times pointed out that although Facebook promised to protect user information, the company granted third party websites to benefit from your information while you browsed other sites to create a “personalized” web experience. They neglected to inform users of the possibility to opt out of this “personalization” by logging out of Facebook prior to browsing a website or by clicking “no thanks” on sites asking for permission to access your information. The NY Times further revealed that Facebook obtained the right to save your information regarding messages and photos even after you had deleted your profile entirely, despite the fact that this issue has been settled by a new policy promising to permanently delete all information associated with your account upon profile deletion

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    There have also been legal concerns regarding Facebook obtaining users confidential email addresses and sending unsolicited emails to their friends and colleagues encouraging them to join the social networking site. Actions like this have attracted controversy in countries where stricter privacy policies exist, and even in the United States, the Constitution itself in the core foundation area of Liberty and freedom of association without fear of retribution. For many countries, the ongoing investigation is focused on the infringement of the privacy rights of individuals, and the fact that no company should farm humanity for commercial gain. Other concerns have been that Facebook has unlawfully gathered information on non-users that have entered websites outside of Facebook by the use of tracking-cookies (generally sites where the Facebook Like-button is included).

Openness:

    Facebook aims to act boldly and values openness, and believes that an open world is a better world. They believe that with more information, people can have a greater impact and therefore make better decisions. Their mission is to build social value by helping the world to be more open and connected place, encouraging people to build real value in everything they do. This value is admirable in theory, but does not always successfully apply to a company represented in 213 diverse countries. Social norms, political views and regulations differ widely across the globe. In the US, free speech and the first amendment are appreciated, and users may accept Facebook’s act of complete transparency to a larger extent than in more strictly regulated governments. In the United States, privacy legislation allows Facebook to use consumer’s information with few restrictions.

    In Europe, privacy regulations are strictly defined, and the company is lawfully restricted to sell information about its users without their consent, and must promise to permanently delete information upon users requests. In the middle-east Facebook is widely used to connect demonstrators and activists giving them an opportunity to raise awareness and spread messages without the use of violence. This opportunity benefits users, but has raised concerns in governments in war-prone countries like Libya and Egypt where they as a result of this “open world” value are demanding stricter regulations of the sites utility. The complete transparency may compromise users intention to raise awareness for causes in fear that their enemies will be able to track their families, friends and themselves down. In extremely regulated countries like China, the site is banned entirely.

Responsibility and honesty:

    The world is still familiarizing with the vast digital dependence their lives are facing. Considering the social sites rapid growth in only eight years, the demand for user control and awareness increases as our sense of privacy and social boundaries simultaneously decrease.

Economical:

    Amongst Facebook’s most vital values is the importance of remaining profitable and economically sustainable. After the company went public in 2011, they have suffered from plummeting stock prices and a decrease in value. To be able to proliferate and profit Facebook needs to focus on what is best for business by increasing advertiser benefits, which in their case is highly dependent on sharing user information. Their future value now depends on their ability to persuade investors and shareholders that there are sustainable growth opportunities in advertising revenue, and by inventing new ways to monetize their services.

PRINCIPLES

Digital Integrity

    For both Facebook and users, sustaining digital integrity is an important principle. To gain a sense of responsibility for the information disclosed from both parties and to trust one another for a common good. Facebook clearly operates by Mill’s utilitarian principal; doing the greatest amount of good for the greatest amount of people. Facebook’s values prove that they prioritize openness and engagement within a global community and believe that the more information everyone openly shares, the more we can mutually benefit from the site as users and corporations.

Digital Darwinism

    In the era of digital revolution Facebook opts to be the leader within social networking innovation and strives to push for continuous development. They strive to meet demands from consumers, employees, shareholders and users to maintain their position as a social empire. Many businesses follow, and many are competing to survive, but few compete for relevance like Facebook. Facebook tries to listen and understand users needs, and tries to create experiences, rather than simply reacting to them. Facebook believes that the future holds change, and its business model and evolution remains proof of it. Facebook created an era where consumers and employers are empowered, and realize that they may either fall to natural selection or rise to continue to lead the revolution. It values its relevance and relationship to the people, because without them, Facebook’s is irrelevant.

Self-preservation/protection – for both users and Facebook, protection is vital.

    Users: As a trusting Facebook-user they do not want to feel misguided or exploited to Facebook’s advantage by realizing that their private information has been shared without their consent. Users wish to protect their identities from theft and limit the scale of accessibility to others.

    Facebook: As a public company they have to protect their business and shareholders by remaining relevant and profitable. Their business model suggests that this occasionally compromises certain aspects of their users diligence and information.

LOYALTIES

Company

    There is little doubt that Facebook’s ultimate loyalty lies within the company itself. To remain innovative within the social media landscape, Facebook relies on inventing new ways to attract users and retain old ones. Facebook’s continuous change of policies and rules may seem to be their easiest option to help them stay relevant in the market and to create a better user experience. Facebook wants to preserve its brand; despite the fact that Facebook has become a large company surpassing one billion users, they have tried to maintain their original idea – connecting people and improving their social lives.

Advertisers

    Facebook’s main revenue stream comes from advertisers. With massive revenue streams, Facebook is able to grow and to improve their services. For this reason, the company needs to assure advertisers that their ads will reach their audience and be able offer them advertising benefits, including more targeted and effective advertising campaigns based on the vast amount of user information they possess.

Shareholders / Investors

    Since Facebook went public in 2011, they have a special obligation to shareholders and investors. A dramatically overvalued initiation price and subsequent decrease in perceived future value has put the company under tremendous amounts of pressure. Understandably, shareholders and investor are expecting to see greater profits and results. Consequently, Facebook realizes that every business move or media statement is under examination.

Different governments / laws

    Every country has its own laws and regulations about privacy and use of information. In order to avoid legal complications, Facebook needs to meet these regulations and adapt its policies according to different countries’ standards.

Users

    Facebook wants to offer the best possible user experience while keeping its services free of charge. In order to offer the best service to their users, Facebook needs to seek optional sources of revenue by offering the best possible sales pitches to advertisers. Hyper-targeted and personalized advertising creates a greater user engagement and is more relevant than commercialized and standardized advertising that prove beneficial to neither advertisers or users. The potential risk of increased advertising would be that users get so accustomed to advertising exposure that they automatically filter it out of their attention span.

    Users are increasingly expressing concern that their privacy is at risk because of the company’s strategic privacy modifications and policies on the topic. Many believe that Facebook violates their privacy boundaries and deliberately acts against their interests simply to increase revenue. In a way, users feel more like a product (as a demographically calculated pair of eyeballs) than actual customers of a service, that Facebook willingly auctions off to the highest bidding advertiser.

    In our modern digital age, people are increasingly dependent on Facebook, and the social network has evolved into a need, obsession or in some cases, an addiction. We spend vast amounts of our personal and work time on Facebook, and rely on its services daily to communicate with other people, catch up with friends and acquaintances and make connections to people all over the world. It is hard to imagine a world without it. Our conflicting interests are that we would like to be able to enjoy Facebook, without risking our private information for commercial gain.   

JUDGEMENT

    When we initially started researching and discussing Facebook's ethical conduct, we were skeptical and surprised upon investigating Facebook’s history and privacy policy. We found several examples that proved unethical and perhaps even illegal behavior. In our opinion, Facebook has mislead its users upon several occasions with recurring  and unannounced changes of  privacy policies that contradict their core values (respect for privacy, trust, etc.). In fact, one may argue that Facebook doesn’t always follow its own statements of rights and responsibilities. The company has mistakenly disabled user accounts, wrongly accused users of fake identities and censored search results. On other occasions Facebook has kept using users’ private information even after they have deleted their accounts. These are just few examples of Facebook’s questionable behavior. Users are often caught off guard when faced with the amount of private data suddenly publicly available without their authorization.

    After digging deeper, and deliberating the pros and cons of having a Facebook account, we landed on a more rational mindset. Essentially, we decided that although we might be frustrated with Facebook’s business tactics, it is important to remember that Facebook is a privilege, not a right. We would even claim that one can live a fulfilled, or even a more productive life without Facebook. It certainly does not determine our existence. Although one might feel pressure and temptation, we are not forced to subscribe to the service. As a user of a free service like Facebook it is  every user's responsibility to be aware of the actual commitments and privacy contracts they agree to upon registering, and to stay alert when changes are announced, however subtle they may be.

    Facebook should not be held responsible if users neglect to read the terms of use contract. Contracts like these are common in any service that one agrees to utilize. There is also the aspect of personal responsibility for sharing. When we decide to publish something – a photo, a statement, or an article – we are personally responsible for our actions. Although we essentially believe that what we choose to share is available only to our chosen friends, information that we share online rarely remains private if it attracts enough interest. Facebook facilitates sharing whatever you chose to share with your friends further to friends of theirs that you initially did not intend to share with. The golden rule is that if one wants something to stay private; the only way to secure it is by not sharing it online.

    It is important to consider that Facebook offers its services free of charge and that users tend to take its services for granted. Facebook, as any other company, needs accountable revenue sources to survive and to be competitive. In particular, since the company went public, the pressure to be profitable has exponentially risen. It is due to advertising that Facebook can offer us its many beneficial services for free.

    One can also argue that as long as nearly all Internet driven business’ survive thanks to advertising, tailored and specialized advertising  derived from Facebook’s information-bank can only improve our experience of advertising. If we are required to be exposed to advertising anyway, why not see something that is relevant to us?

    Our judgement favors Facebook’s tactics of using our personal information to gain advertisers. Despite this, there are several questionable practices that should be addressed in Facebook’s ethical conduct. To remain trustworthy and competitive, they should be distinct and honest when undergoing privacy changes and not continue to practice the rather dubious “easier to get forgiveness than permission” tactic that they seem to have relied on up until now. Being in custody  of the private information of such a large percentage of the world population compared to other companies, they also have a moral responsibility to  protect it. In our opinion, if Facebook makes changes to the terms of services contract that users sign upon registration, they should be held morally, if not legally, responsible to inform users.

    In conclusion;  it is the users responsibility to read, understand and agree to the current terms of use that Facebook requires you to sign upon registering to the site. The fact that Facebook continues to discreetly modify their privacy policies after vouching not too, damages the trusting bond between Facebook and users. It ultimately contradicts their core values and principles and is ethically wrong. In our opinion, as long as Facebook adequately notifies users of change and clarifies the terms of use and information, it is every users personal responsibility to stay aware and alert to the inevitable consequences sharing personal and private information online can have.

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