The Facebook-Cambridge Analytica Scandal and Its Implications for Business Ethics
and CSR
I.
Introduction
Data collection and use has been the backbone of business processes in this digital
age. However, the very need to rely heavily on data has escalated some serious
questions about its ethical use, especially when companies misuse or exploit people's
trust. The perfect example is the Facebook scandal with Cambridge Analytica: ethical
lapses in data management can result in damage not just to a person, but also to the
respectability and integrity of an organization.
In this term paper, the case of how Facebook collected and misused millions of users'
personal information allegedly used to influence political results, with their unwitting
participation, is looked into through the lenses of corporate social responsibility (CSR)
and business ethics. Such systemic flaws in protecting the privacy of users were
highlighted by the case in promoting transparency very understandably causing public
outrage and attracting the regulatory authority's investigations into the matter. It further
points out how crucial it is for companies to promote responsibility and trust in their
activities.
This study attempts to respond to the research question through a close analysis of
the Facebook-Cambridge Analytica scandal: What ethical lessons can be drawn
from the incident, and how should businesses improve their CSR policies to
prevent similar controversies? The purpose of this paper is to provide more
practical ideas for developing a more moral and responsible digital environment by
exploring major incidents in the scandal, involving critical moral dilemmas, and
regulatory effects.
II.
Literature Review
The Facebook-Cambridge Analytica scandal has been described in detail within the
fabric of business ethics, especially regarding the ethical responsibilities of
corporations in managing data for users. According to Zuboff (2019), the scandal
symbolized the growing risks of unregulated data harvesting practices in the digital
economy. As Zuboff put it, companies like Facebook often act in profit-driven ways
while neglecting ethical responsibility, and therefore huge breaches in trust occur.
CSR is also an essential factor in dealing with the consequences of such scandals.
According to the concept of CSR, business, due to the need to increase stakeholder
confidence, should not only make profits but also fulfill ethical and social
responsibilities. In addition, an organization can avoid reputational loss and legal loss
if it takes proactive measures of CSR like open data policies and mechanisms ensuring
user consent (Carroll & Shabana, 2010).
Further, researchers discuss the policy implications of such scandals and state that
there is a need for stricter privacy laws. Solove (2020), in his book Understanding
Privacy states that cases like Facebook-Cambridge Analytica reveal significant breach
in protection frameworks of data. Solove believes the control of user data must be
entrusted to both the state and an organization where the responsibility would follow
as the data shall be protected. Clear legal standards and enforcement mechanisms
will be required to prevent future misuse of personal data. This view puts it clear that
corporate practices must change with shifting and new forms of regulation and shine
light on the responsibility of accountability in the digital world.
III.
Methodology
This paper utilizes case study approach to explore the Facebook-Cambridge
Analytica scandal and its impact on CSR and business ethics. Secondary research
sources have been relied upon in gathering data on the matter, such as reports of
regulatory bodies like the Federal Trade Commission (FTC), scholarly pieces about
data ethics, and news items from sources such as The New York Times. Through
synthesizing a content analysis of public relations activities by Facebook and
Cambridge Analytica, as well as the examination of relevant regulatory findings,
including the FTC settlement, was utilized.
Secondary sources are limited in the representation of internal and latent
decision processes. Yet, amidst all the constraints, the research conducts an all-round
study based on credible sources and there is visible evidence to base them on.
IV.
Analysis and Findings
This section consider ethical concerns of the scandal between Facebook and
Cambridge Analytica it brings into focus data privacy issues, corporate accountability,
and lack of laws. The information was collected from news articles, cases, and
statement and responses of Facebook and the regulators. The evidence presented is
grouped under core themes which are derived from the research question of whether
it is possible for Facebook’s business model to embrace ethical values and CSR as
well as meet regulatory compliance without necessarily suffering lack of growth and
profitability.
1. Ethical Failures in Data Handling
Facebook’s biggest ethical issue was privacy or more accurately the lack thereof and
the company’s inability to secure user data. Facebook has long face a recurrent
scandal, the most recent and famous one, Cambridge Analytica, a political consulting
firm, harvested the data of millions of Facebook users through a third-party app the
users download without clearly giving there consent. In addition to actively gathering
information from users who agreed to that, it also took data from their friends,
expanding the base of data dramatically. This was clearly a grotesque betrayal of trust,
indicating incredible secrecy and ducking responsibility that involved Facebook’s datasharing procedures.
2. CSR Limitations (Corporate Social Responsibility)
According to CSR, business should behave in a way that the benefits it imparts are
more than just financial welfare of the business organization. In this area, Facebook
made its fatal mistake and allowed third-party companies to abuse the target’s data.
Far from safeguarding users’ privacy, Facebook facilitated the use of their data to
place even political ads with negative impact on the user and the public. This proved
that-facebook lacked the usual societal responsibilities they should have displayed to
users hence the failure in building trust.
3. Regulatory Gaps
This misuse was possible because at that time, there were inadequate rules protecting
data privacy. case in 2018, there were no specific laws that governed how these
companies including Facebook dealt with users’ information. This lack of regulation
was an opportunity for Facebook precisely until the scandal. Many tech companies
have failed to provide the highest standards of personal data protection, and that
resulted in violating users’ rights.
V.
Discussion
The study reveals some crucial organizational unethical issues in the
Facebook-Cambridge Analytica scandal in terms of data privacy, CSR as well as lack
of strict policies. While being supposed to safeguard its users, Facebook provided third
parties with their data and remained negligent and nontransparent. From the
standpoint of business ethics, these actions harmed loyalty and did not meet the
principles of CSR, which calls for successful company operation to defend
stakeholders’ interests.
The law of data privacy is the biggest ethical concern of keen interest. Users
have been given into Facebook’s collection of user details without their express
permission, with millions of people exposed to threats they did not bargain for. This is
in concord with research works that bear on the (Isaak & Hanna, 2018) who noted
that, ethical use of data is essential for, trust creation and exercising responsibility
towards the society. To this end, actions of Facebook raised awareness about the
need of the company to change and protect the users’ data. It should maintain the
user control and awareness of data and increase the accountability for data at the
same time.
The research also self-identifies other deficiencies in regulation that enabled
Facebook to mishandle user data appropriately. Even before the recent incident of
Cambridge Analytica, there were no specific laws that guaranteed user’s data and thus
would be exploited easily. Past research indicated that the absence of stringent
policies make way for unsavory actions that put users in danger (Binns, 2018). This
study builds on those facts and reveals that poor regulations, exacerbated by
Facebook’s business model, made things even worse.
VI.
Conclusion
This paper examined the ethical issues shown by the Facebook and Cambridge
Analytical scandal in terms of data privacy, CSR and; regulation. The results indicate
Facebook made user’s personal data vulnerable and were used in unauthorized ways,
which violated the users’ trust and ethical standards. Facebook privacy scandal
revealed that the organization did not act in line with CSR principles as it disregarded
user best interest. On top of this the laws were not very strong and this meant that
such misuse could easily occur without reprisal.
This research shows that Facebook and such like firms require reviewing how
they treat information and their commitment to society. However, to meet the
requirements of ethical and CSR concerns, they should make sure the users have full
control over data; enhance the level of openness; and accept responsibility for the
data processing. These changes must be done in order to regain trust, meet the code
of laws and run a company that treats user and society well.
These are some recommendations to this study:
1.
Stronger Data Privacy Policies: Facebook should make certain rules that
could prevent leakage of users information. This range from avoiding the use of data
that was obtained in a clandestine manner and not sharing any data that was procured
without the consent of the person whose data it was. There should be an informed
understanding about the use of data and provide the user with improved tools to
manage this data.
2.
Better Accountability: Facebook must bear even more obligations for
user safety. This means writing down ethics about how to use the data and let separate
entities oversee their implementation. When data is stolen or misused, for example,
the simplest way to regain the faith of the users is by informing them of the incident.
3.
Improved Compliance with Laws: The law should be stronger and
Facebook should ensure that they follow the laws excising in the countries its operating
in. It also can operate alongside governments in order to establish new regulations
that would govern the ethical processing of the data by all companies in the industry.
4.
Educating Users: Besides, Facebook should explain to people about
their data’s rights and privacy. Most people have limited knowledge of how their
information is gathered, used and processed when using an app; Therefore, by
presenting this information in a simple format it helps users to make informed decisions
and have control of the information they provide.
5.
Ethical Use of Technology: Hence, new technology should be used to
improve the security and visibility of its systems by Facebook. For instance, applying
of artificial intelligence in the proper handling of the data can enhance on the security
of data and curb the misuse of data.
More research could be conducted to determine attitudes that people have towards
violation of their data and the impact the experience makes them have on using the
Internet. More research could also be conducted regarding how data privacy laws
operate in different nations affect companies such as Facebook or whether such
legislation has the potential to make the process fair. Moreover, it can look for
inspirations in other domains, for example, new technologies such as blockchain that
could offer the designs for the construction of more secure and transparent systems
that will reinstate user trust.
VII. References
Binns, R. (2018). Data protection impact assessments: A meta-regulatory approach.
International Data Privacy Law, 8(3), 13-19.
Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social
responsibility: A review of concepts, research, and practice. International Journal of
Management
Reviews,
12(1),
85–105.
https://doi.org/10.1111/j.14682370.2009.00275.x
Isaak, J., & Hanna, M. J. (2018). User data privacy: Facebook, Cambridge Analytica,
and privacy protection. Computer, 51(8), 56-59.
Solove, D. J. (2020). Understanding privacy. Harvard University Press.
Zuboff, S. (2019). The age of surveillance capitalism: The fight for a human future at
the new frontier of power. PublicAffairs.
VIII.
Appendices
FTC imposes $5 billion penalty and sweeping new privacy restrictions on Facebook.
(2024, August 20). Federal Trade Commission. https://www.ftc.gov/newsevents/news/press-releases/2019/07/ftc-imposes-5-billion-penalty-sweepingnew-privacy-restrictions-facebook
Meredith, S. (2018, April 10). Facebook-Cambridge Analytica: A timeline of the data
hijacking scandal. CNBC. https://www.cnbc.com/2018/04/10/facebookcambridge-analytica-a-timeline-of-the-data-hijacking-scandal.html