Facebook’s Fall from Grace

Following the attack at a mosque in Christchurch in which 50 people were murdered, New Zealand’s Prime Minister Jacinda Ardern called on Facebook to do better;

“They are the publisher, not just the postman. It cannot be a case of all profit, no responsibility.”

She has a point, during the shooting in Christchurch the shooter live streamed his rampage through two mosques. I have seen a couple of screen grabs from the video and the images look like a very graphic shooter game. We now know that the first man to see him at the first mosque greeted him with the words “Welcome, Brother” and presumably this greeting was recorded on the live stream. It’s now illegal to publish the video stream in New Zealand, and the article where I saw these images has been taken down. To give Facebook credit once the New Zealand police alerted them I understand their Global Escalations Teams worked to remove instances of the live stream from their platform. But technically, under US law, they cannot be held responsible in court.

The video may still be out there, I’m not interested in seeing it but when researching for this article I found an interesting autocomplete in a google search, and it seems the effort to remove the video was not perfect.

In the Easter shootings across Sri Lanka which had a significantly higher death toll, their government worked quickly to block social media, and continue to circumscribe citizens’ use of social media. It’s not the first time the Sri Lankan government have blocked social media due to concerns about the spread of extremism via social media sadly.

How is this possible?

Social media platforms have benefited from a piece of US law, section 230 of the US Communications Decency Act which says;

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider”

It’s an important part of maintaining free speech on the internet and it means I’m not liable for comments someone leaves on this blog, and nor is WordPress. The EFF explains in more detail.

More scandal

This isn’t the only issue Facebook has been faced with, last year they admitted to a security breach that may have affected 90 million accounts.

There are also growing concerns about health impacts as research piles up about the harmful impact of social media, particularly on children. There’s also evidence that anti-vaccination activists are targeting ads to people likely to be wavering on the vaccination question, and the number of Measles outbreaks keeps growing.

More famously their algorithms have undermined democracy in at least two countries. This is via the link to Cambridge Analytica, here’s how that worked as explained by journalist Carole Cadwalladr;

With all this scandal, how is the company doing?

Well. Facebook is doing well.

Revenue continues to grow, user numbers continue to grow. User numbers have apparently levelled off slightly in the US and in Europe, but it’s not clear that this is due to scandals.

Facebook currently makes more than 1.6 million USD per employee, 98% of their revenue is from advertising (2018 annual figures).  Which begs the question of just who the customer is. Remember that they don’t pay for any of the content placed on Facebook – in contrast to, say, a glossy magazine like Vogue which at least provides some content to dilute the advertisements. So we, the users are the content providers and our attention is the commodity sold to advertisers.

Regulation Required

It seems this isn’t a problem that the free market can solve. We’re now living with a platform that is with us 24/7, pulls together a global community of almost half the world’s population, and holds data on our every move – and tends to seek more data rather than less. One way that Facebook has grown is by acquiring Instagram and WhatsApp, and the company is now so rich that it can buy any competitor thus stifling innovation. Governments have seen the impact on their country – in Sri Lanka, in New Zealand with devastating effects – and in their elections. During the campaigning to appeal the 8th amendment in Ireland Facebook banned all ads that were funded from outside Ireland, showing that it is possible to contain the damage of foreign influence. The EU put the GDPR legislation in place, in an attempt to protect citizens against the power that Facebook and other social media companies have accrued, in response Facebook moved millions of accounts from Irish servers to US servers – out of the reach of EU legislation.

The US is also stepping up, with the FTC investigating Facebook’s use of personal data and a hefty 5 billion USD fine looming over the company. Even that might not be enough, there’s a bipartisan call for tougher protections on consumer privacy.

I started writing this post in December, it’s been re-written more than any other post I’ve ever made, but every time I thought I was ready to hit publish something else happened. I nearly delayed again to analyse the information coming out of F8 and more analysis on the appearance of a change in Facebook’s policy on privacy, there’s a pretty good analysis on the Vergecast – they’re not convinced and nor am I.

Image via pixabay

Scandals and Company Culture

Years ago a court judge in New Zealand was convicted of expenses fraud, the judge’s defense was that he hadn’t understood what the forms required. The public reaction was disbelief; either he just thought he could get away with it or he was too stupid to be a judge.

Since that early example I’ve looked at company scandals and the explanations given with a suspicious eye. In every case there are signs of how the company culture has effectively colluded around the scandal – it’s never just one person, it’s people turning a blind eye, it’s fear of whistleblowing, it’s the company culture, it’s the CEO.

Following the Enron scandal I heard a story, possibly apocryphal, of a manager who joined the company. Shortly after joining he heard that the ambitious revenue targets had been sent out across the company, requiring a jump of 25% in sales from one quarter to the next. At the end of the next quarter, to his amazement, those sales targets had been met across the company. He smelt something rotten and decided to update his CV and move on, he was not surprised when the Enron scandal broke. At the time it was the biggest corporate bankruptcy the world had seen. The Sarbanes-Oxley Act was passed to prevent scandals of this scale ever happening again (it didn’t).

In the Bernie Madoff Ponzi scheme his family members were involved in the company, including his brother who was appointed as Chief Compliance Officer. There are rules in many companies about potential conflict of interest when partners or family members work together.

More recently Wells Fargo came under fire for the cross-selling scandal where staff opened credit card accounts for non-exisiting clients in order to meet targets. In companies employees focus on what gets rewarded; and when enough pressure is applied from their bosses and their colleagues some will break rules to meet those targets. The company directors’ failure to halt the scheme was called “gutless” by Elizabeth Warren – the company maintains that the employees – all 5,600 of them (so far) acted alone. Either the bosses knew or they should have know, but so far none have taken responsibility.

John Oliver’s piece on the US police system exposes the myth of the “one bad apple” and looks at some of the systemic issues behind the fatal police shootings in the US. The failures of process and policy erode the public trust in the police, reducing their ability to their job.

The points John Oliver makes could equally apply to businesses.

  1.  Leadership
    Your leader must lead, her actions must demonstrate her high ethical standards and she should speak clearly and frequently about the company’s ethics.
  2. Monitor/Collect data
    We can now analyse data and patterns of performance, look at patterns and changing patterns. At a financial institute I worked at we were required to take a break of at least two weeks. HR sold it as being good for employees but my security colleagues gave another explanation, the two week break was long enough to highlight any odd activities.
  3. Avoid conflict of interests
    Keep review processes independent, external if possible. Don’t hire siblings or partners into the same field. Declare any outside interests that might raise a red flag – I wrote some columns for a (former) supplier. I had to declare this and I donated the income to charity to remove any potential conflict. Independent reviews make a difference
  4. Transparent Processes
    The more open you are, the more public you can be about your processes, the less opportunity there is for fraud or scandal. A very simple example; some universities are using blockchain to certify their qualifications, as that becomes a public record there is no chance to create a fake degree.
  5. Rewards
    Be careful what you reward, that will direct the employee’s focus and in extreme cases leads to unethical behaviour to reach stretch targets.
  6. Whistleblower procedure
    Even with all the best practices in place something could go wrong. Create a robust, independent whistleblower procedure.  Whistleblowers are generally punished for coming forward, be the exception.

Building a scandal resistant company culture is not easy; not doing so is expensive, even fatal.

Image: Shhh  |  philm1310 via Pixabay  |   CC0