Lawsuits may be key to tighter US data privacy rules
Facebook is under pressure to review its data privacy rules following a data harvesting scandal with a UK firm
Facebook on March 21 announced further limits on apps that gain access to its users' accounts. The move comes after Facebook suspended a UK political consulting firm, Cambridge Analytica, following allegations on March 18 that it improperly obtained personal data on 50 million Facebook users that was subsequently used in political campaigns. The incident has reignited the debates in the United States and elsewhere on online privacy, targeted messaging and whether tech firms are now too powerful to be left to regulate themselves.
Our judgement
Facebook will need to rebuild trust with its users after its latest but largest data privacy scandal and tardy public response. Increasing calls for regulating the social media platforms will fall foul of political partisanship in the United States. User abandonment of Facebook is also unlikely to get sufficient traction to force the company to change its business model. However, lawsuits against Facebook by investors and users will be more likely to lead the company to tighten up lax monitoring and enforcement of terms of service concerning use of users' data by third parties.