Facebook Data Scandal Has Left Zuckerberg Isolated in Tech
(Bloomberg) -- Facebook Inc. Chief Executive Officer Mark Zuckerberg has found himself with few defenders in the technology industry.
Apple Inc. CEO Tim Cook, Tesla Inc.’s Elon Musk and Salesforce.com Inc.’s Marc Benioff have criticized the social media network in the wake of its user data scandal involving political-advertising firm Cambridge Analytica. Other tech leaders have remained quiet in the ensuing backlash against Facebook, in contrast to Silicon Valley’s usual practice of rallying around its own during major crises.
Facebook has sought to repair its public image and trust with more than 2 billion users after reports surfaced that Cambridge Analytica obtained data on as many 50 million of those U.S. accounts. As Zuckerberg, 33, faces calls to testify before Congress and lawmakers raise the idea of new regulations on tech, his peers have either stayed quiet or publicly criticized his company. In times of crisis, tech companies have sometimes huddled together to defend the industry, such as when Apple fought the FBI to protect an encrypted iPhone and during President Donald Trump’s proposed immigration ban last year against mostly Muslim countries.
“Protecting privacy is good for business now,” said Gennie Gebhart, a researcher at the Electronic Frontier Foundation, an organization that advocates for digital privacy. “Users are looking for other big tech personalities like Tim Cook, like Elon Musk, to be reassured that they’re not doing what Facebook did.”
When Apple was fighting an FBI attempt to get into an encrypted iPhone, Facebook joined Alphabet Inc.’s Google, Microsoft Corp. and other large tech firms to support Cook’s stance. Still, Apple executives, including Steve Jobs, have criticized internet companies’ advertising business models in the past.
Cook was asked about Facebook’s privacy crisis last month and called for stronger regulation of user data. Then, in an interview with Recode and MSNBC, Cook said he “wouldn’t be in this situation” if he were in Zuckerberg’s shoes. While Facebook makes money selling targeted advertisements based on user data, Apple’s profit comes from hardware products like the iPhone, iPad, and Mac.
Zuckerberg responded in an interview with Vox, published Monday: “I find that argument — that if you’re not paying, that somehow we can’t care about you — to be extremely glib and not at all aligned with the truth.”
“There are a lot of people who can’t afford to pay” for a service and that having an “advertising-supported model is the only rational model that can support building this service to reach people,” Zuckerberg said. “If you want to build a service which is not just serving rich people, then you need to have something that people can afford.”
Facebook’s shares have dropped 16 percent in the past two weeks since the Cambridge Analytica issue surfaced.
The criticism from others in the industry may reveal a division in attitudes between social media and other types of tech companies that don’t rely on personal data for advertising businesses.
“In a normal state, I wouldn’t expect Tim Cook to be a natural defender of Facebook’s interests,” said Anthony DiClemente, an analyst at Evercore ISI.
Since social media companies have to leverage user data in order to better sell to advertisers, it becomes harder for them to promise strong privacy while retaining a robust business model.
Gebhart said that privacy is increasingly a selling point for technology users, but for social media companies, data abuses are a feature, not a bug.
“This is about the entire web surveillance-based and advertising-powered business model,” she said. “Facebook is just the worst or best at it, depending on your view of surveillance.”
Even social media company Snap Inc. seemed to be poking fun at Facebook’s woes. For April Fools’ Day, the Snapchat app rolled out a satirical filter with fake Cyrillic that mimicked Facebook’s user interface. The bottom of the image said it was liked by “your mom, a bot and 2 others.” Some on Twitter interpreted the gag filter as a reference to Facebook’s troubles with Russian meddling on its website.
While WhatsApp co-founder Brian Acton joined the #deleteFacebook bandwagon, Gebhart said other social media networks such as Twitter Inc. and Microsoft Corp.’s LinkedIn have mostly stayed quiet during the firestorm against their rival.
Salesforce’s Benioff, in contrast, has been vocal for months on the need for Facebook to be regulated like tobacco, and reiterated that view last month at a company conference.
“I got in trouble with friends of mine at Facebook, who were calling me and very upset with me because I said, ‘Facebook is the new cigarettes,”’ Benioff said. “It’s addictive, it’s not good for you and there’s outside forces trying to manipulate you to use it.”
Musk deleted the Facebook pages for his companies, Tesla and Space Exploration Technologies Corp., after a Twitter user asked him to last month.
Musk later said he wasn’t making a political statement, nor did he have the sites taken down because of pressure from Twitter users.
“Just don’t like Facebook,” he wrote. “Gives me the willies. Sorry.”
©2018 Bloomberg L.P.