The Knock-On Effect of Facebook’s Data Blunder

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Following the recent scandal surrounding Facebook & Cambridge Analytica, Dorothy Agnew​, Partner, Corporate and Commercial at Moore Blatch, discusses some of the knock-on effects this will have for charities and consumer behaviours all-round.

Facebook’s woes are likely to have far broader implications than the financial fortunes of global social media companies. The consequences of their actions could have a financial impact on charities, right here in the UK.

Thousands of organisations and charities across the UK rely on the income raised from promoting third party goods and services to their customers, members and supporters. For them, the fallout of the Facebook and Cambridge Analytica data scandal, and it’s almost a perfect coincidence with the introduction of GDPR, could not come at a worse time.

These organisations rely on their customers or members’ trust to advertise third party products and services to them. Whether those selected third party organisations are promoting travel insurance, holidays or conservatories the commission or payments they make to data owners can be very sizeable and for many charities be critical.

Trust is an interesting concept. While it might mean different things to different people, for most of us it boils down to doing the right thing.  A betrayal of trust among those who use or don’t use Facebook can be equally devastating for bystanders including charities who become innocent victims of collateral damage.

In November last year, well in advance of the Facebook scandal, the ICO found that only one fifth of the UK public had trust and confidence in companies and organisations storing their personal information. Steve Wood, deputy commissioner of the ICO said at the time: “By now organisations should be aware of the changes to data protection law next May. It’s no longer acceptable to see the law as a box ticking exercise. Organisations will need to be accountable, to their customers and to the regulator.”

For Facebook and its relationship with Cambridge Analytica there has been for many people a betrayal of trust, as what the organisations sought to gain was not always in their members’ best interest. And, this is possibly true of other commercial relationships from charities to public bodies. Just four years ago the NHS faced criticism for selling medical data to Critical Illness providers; now while some people may have benefited from reduced premiums many others will not have, and would those people have supported such a data sharing relationship?

Regardless of Facebook’s fortunes, whether or not their growth flat lines or declines across Europe as they have said it might, the bigger issue is how their actions could precipitate a knock-on effect on consumer behaviour in opting in, out, or just ignoring requests from organisations keen to conform to GDPR.

The consequences could be substantial for organisations such as charities that depend on data for an income stream. And, from a legal perspective much clearer opt-in and opt-out wording will be required to explain how your personal data might be used – ‘marketing purposes’ no longer being a catch-all.

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