CAMBRIDGE ANALYTICAL SCANDAL AND

DATA PRIVACY IN TODAY‟S WORLD

MASTER OF BUSINESS ADMINISTRATION
KANNUR UNIVERSITY
Submitted by
Abhinav M
Aujitha M
Nimitha M

Under the guidance of

Dr. KIRAN RAVEENDRAN

ASSOCIATE PROFESSOR

DEPARTMENT OF MANAGEMENT STUDIES,

CHINMAYA INSTITUTE OF TECHNOLOGY, KANNUR

2018-2020
 DECLARATION
We Abhinav M ,Aujitha M, Nimitha M are MBA students of Chinmaya Institute of Technology
here by declares that the presented report of research entitled, Cambridge Analytical Scandal and
Data privacy in today‟s world . Has been prepared by us and submitted in partial fulfillment of
requirements for the award of the Master of Business Administration, is record of original work
done by us under the supervision of Dr Kiran Raveendran Professor School of Management
Studies, Chinmaya Institute of Technology, Chala, Kannur. We also declare that this project
work has not been submitted by us fully or partly for the award of any degree, diploma, title or
recognition before.

Place:

Date:

Abhinav M

Aujitha M

Nimitha M
 ACKNOWLEDMENT
We wish to take this opportunity to extend our sincere gratitude to all those who had shared their
precious time and knowledge for the successful completion of this project. First of all we would
like to extend sincere thanks to Dr Kiran Raveendran associate professor Chinmaya Institute of
Technology, Chala Kannur for his valuable support and guidance in carrying our project. We
thank group members who had always been dedicated in doing this project work. We thank our
parents for their moral support for the making of this project work as a great success.

Above all last but not the least I would like to thank Almighty for the entire blessings showered
upon us for the completing our work
 TABLE OF CONTENT
SL .NO: TITLE PAGE NO:

1. Introduction 1

2. The Main Individuals/Organizations 2

Involved

3. Chronological Order of Events leading 9

to the Issue

Literature Review – News Articles and 12

other reports regarding this issue
4.

5. The Main Issue 15

6. Ethical Issues Involved 16

7. Resolution of the Ethical Issues and 17

Steps Taken

8. Lessons for Others 18

9. Conclusion 21

10 BIBILIOGRAPHY
22
11. ANNEXURE 23
 INTRODUCTION

The Facebook-Cambridge Analytica data scandal was a major political scandal in 2018. It
scandal put forward that Cambridge Analytica had harvested personal data‟s of millions of
people by using their Facebook profiles that too without their consent for utilizing it for political
adverting purposes. The scandal results in a major fall in Facebook‟s stock price and it also calls
for rigid regulations for tech companies use of personal data‟s of people.

Such illegal harvesting of personal data‟s of millions of people was first reported in December
2015 by Harry Davies, a journalist for The Guardian. He states that Cambridge Analytica was
working for U.S Senator Ted Cruz by using personal data‟s of the people from their Facebook
profile without their consent and it was followed by a refusal by the Facebook CEO to make any
comments against the allegation put forward by Harry Davies. The details about the scandal was
also revealed by other publications like Das Magazine (2016), The Intercept (2017) etc.

The scandal finally came into light with the emergence of a whistle-blower an ex-Cambridge
Analytica employee named Christopher Wylie. He was a spy source for an article which came
out in 2017 in The Observer which was headlined as “The Great British Brexit Robbery” and the
article went viral.

Following the event more than $100 billion was knocked out of Facebook‟s share price and
politicians from U.S and U.K went on for demanding answers from Facebook CEO and this
eventually led him to being present before United States Congress.

The scandal open a way towards discussions on ethical standards adhered by the social media
techs, political consultancies along with politicians. Moreover Consumer advocates called for
greater consumer protection in online media and the right to privacy as well as curbs on
misinformation and propaganda.
 THE MAIN INDIVIDUALS

MARK ELLIOT ZUCKERBERG

BORN: May 14, 1984 White Plains, New York, U.S

PARENTS: Karen and Edward Zuckerberg

EDUCATION: Computer science Harvard University

SPOUSE: Priscilla Chan

KNOWN FOR: co-founding and leading Facebook

He was very font of computers during his childhood own wards and when he was just 12 he
developed an instant messaging application which was used by his father in his dental clinic.
Zuckerberg joined Harvard University and later on he dropped out from there to focus on
developing Facebook.

As per Forbes his net worth amounted to 463 billion as of April 2018. He also portraits a very
positive outlook towards philanthropic activities and as such he along with his wife was ranked
as the most generous American donors after they donated about 18 million of the companies
share to Silicon Valley Community Foundation.
He also went on for publishing “A letter to our daughter” on Facebook in which is proposes the
creation of the Chan Zuckerberg Initiative for people across the world to join their hands to
promote equality for all children in the coming generations.

ALEXANDER JAMES ASHBURNER NIX

BORN: 1 May 1975, Notting Hill, London, United Kingdom

PARENTS: Paul David Ashburner Nix

EDUCATION: Eton College, the University of Manchester

SPOUSE: Olympia Paus

DESIGNATION: CEO of Cambridge Analytica

Nix began his career as financial analyst with Baring Securities in Mexico and thereafter in U.K
with Robert Fraser & Partners LLP, Finance and tax advisory firm. In 2003 he joined SCL
group. In 2007 he directed his attention towards developing the elections division, further he also
worked for various political campaigns in U.S, South America, and Europe etc. In 2010 he
launched SCL Social, a non – profit international development agency.
 RAFAEL EDWARD CRUZ

BORN: December 22, 1970

PARENTS: Eleanor Elizabeth Wilson and Rafael Cruz

EDUCATION: (BA), Princeton University & (JD), Harward University

SPOUSE: Heidi Naelson

DESIGNATION: U.S Senator

He is an American politician and attorney serving as United States Senator for Texas since 2013.
He was also the runner-up for the Republican nomination for U.S Presidential election. He was
the 3rd Solicitor General of Texas till May 12, 2008. He also held various positions in
government from 1999-2003.

After completing his graduation Cruz went to Harvard Law School. While at the university he
was a primary editor of the Harvard Law Review a publication of the university and an executive
editor of the Harvard Journal Of Law and Public Policy.
 CHRISTOPHER WYLIE

BORN: 19, June 1989, Victoria, British Columbia, Canada

PARENTS: Kevin Wylie & Joan Carruthers

EDUCATION: (LLB), London school of Economics & (MA), George Washington

University

DESIGNATION: Data consultant

In 2008 Wylie volunteered the Presidential campaign of Obama. In 2010 he joins London School
of Economics to study law and completed his graduation in 2013. He also has expertise in
different fields ranging from technology, media to IP law. Wylie has been awarded with the
Dechert Prize for Property Law. In 2013 he started working for SCL group as Director of
Research.

He ceased his career with SCL in 2014 to launch his own company called Eunoia Technologies
and on departure from SCL he also took several sensitive documents from the company along
with a copy of Facebook dataset of millions of users.

In March 2018 he gave a detailed interview to The Observer revealing about the Analytica
scandal along with proof to support his statement as a whistle blower. His revelations were
instrumental in the collapse of Cambridge Analytica.
 ALEKSANDR KOGAN

BORN: 1985, Moldova

SPOUSE: Crystal Ying Chia

EDUCATION: (BA), University of California, Berkeley & (MA, PhD), University of

Cambridge

DESIGNATION:

Kogan is a data scientist and was also called as Dr. Spectre. He is the one who developed the
application that allowed Cambridge Analytica to collect the personal data‟s of the user. He also
worked as a research associate at University of Cambridge.

He had a post-doctoral fellowship at University of Toronto before moving to Cambridge. He was

also a lecturer in psychology at Cambridge University.

Kogan also had an affiliation with the University of St. Petersburg in Russia. He raises funds for
research on social media data mining through it.
 THE GUARDIAN

The Guardian is a British daily which was founded in 1821. Its former name was The
Manchester Guardian. The company was owned by Scott Trust under Guardian Media Group.
Editor of the daily is Katharine Viner. It also include other publications like The Observer which
is a Sunday newspaper, The Guardian Weekly, international newspaper and also various news
website attached with it for the company to go online. In 2016 the company launched a U.S
based philanthropic firm to raise finance from both individuals and organizations for doing
philanthropic activities. In recent years The Guardian was put in lime light due to its anti-
Semitism and bias in the Israel-Palestinian conflict.

The Guardian was the first publication that instantly reported the Cambridge Analytica scandal
through an interview that it had got from Christopher Wylie.
 FACEBOOK

MISSION: “To give people the power to build community and bring the world
closer together”.

Facebook is an American online social media social networking company based in California.
Along with Mark zuckerberg Facebook was co-founded his fellow Harward students named
Eduardo saverin, Andrew McCollum, Dustin moskovitz and Chris Hughes. A from Amazon

Apple and Google Facebook is one of the Big Four technology companies of the world. It was
founded in February 4, 2004. It was written in various languages like C++, PHP etc. It has
approximately 39,651 full time employees as of June 30, 2019.

OFFICES ARROUND THE WORLD

Facebook has its branches in following places: Amsterdum , Atlana, Auckland ,Bangok,
Benguluru, Berlin, Bogota, Boston, Dubai, Fremont, Geneva, Hamburg, Hong Kong, Jakarta,
Melbourne Paris, Rome, San Francisco, Tokyo, Vancouver, Washington D.C, Zurich etc. and
anymore.

DATA CENTRES:

Facebook has its data centers in the following places Prineville, Forest City, Altoona, Fort
Worth, Clonee, Los Lunas, Singapore, Huntsville, Odense etc.

LEADERSHIP:

Founder: Chairman and Chief Executive Officer: Mark Zuckerberg

Chief Operating Officer: Sheryl Sandberg

Chief Financial Officer: David Wehner

Chief Technology Officer: Mike Schropher

In mid2005 Facebook raised $12.7 through venture capital and expanded to various universities
and schools and in 2006 it was opened to general public. Yahoos offer to acquire the company
was refused by Zuckerberg.

The company went public and became successful within a short span of time by 2012 and in the
same year it bought photo sharing application called Instagram. Further the company has
acquired various companies like whatspp, osculus and various others ranging from artificial
intelligence to identification platforms.

MOTTO: “Data drives all that we do”.

Cambridge Analytica is a London, U.K based company that deals in data analytics, advertising
and consultation. It is an offshoot of British company named Strategic Communication
Laboratories (SCL) and was set as a subsidiary to it. During its initial stage it focuses on
Facebook and such other social media companies to run advertisements which include political
campaigns based on user profiles. The saga of Facebook sourcing began in late 2014 with the
creation of an app by an external psychology lecturer at the company which gathered personal
data of around 50 million users on Facebook and the collected data were then transferred to
Cambridge Analytica. It also deals in a series of other activities ranging from food security
research to counter narcotics to political campaigns.

The company goes on for marketing itself as providing consumer research, advertising and other
data related services to both political as well as corporate clients. The company was accused of
stealing data‟s of millions of Facebook users with a view to deceive both Facebook and its users.
This was done through an application which collects user data along with their friends online.
Analytica pass on this information in favors of Ted Cruz who was one of the candidates for the
U.S presidential election. Following the allegation put forward against the company there were
many untoward situation which the company was bound to face. Initially the companies go on
for rejecting the allegation put against the firm until the scandal was openly revealed in front of
the public by a whistle blower named Christopher Wylie.
 Chronological Order of Events Leading to the
Issues

FACEBOOK – CAMBRIDGE ANALYTICA: A TIMELINE OF THE DATA

HIJACKING SCANDAL

April 21, 2010 – Facebook launches Open Graph

Facebook announced the launch of a platform known as Open Graph, this update allowed the
external developers to have access to Facebook users and request permission to reach out to a large
chunk of their personal data and critically to their Facebook friends personal data too. Moreover if
accepted these apps would have then access to a user’s name , gender , location , religious views ,
online chat status and more and with additional permission external sites would could also gain access
to a person’s private messages.

2013 – „This is your digital life ‟

This app was developed by Aleksander Kogan and his company Global Science Research. ,
which promoted the users to answer questions for a psychological profile. Almost 300,000 users
have been paid to take the psychological test - the app will then harvest their personal data,
which reportedly resulted in Kogan having access to the data of millions of Facebook profiles.

2014 – Rule changes

Facebook adapted rules that limit a developer‟s access to user data to ensure that a third party
was not able to access a user‟s friend‟s data without having prior permission.
December 11, 2015 – Ted Cruz

In 2015 The Guardian reported that Cambridge Analytica was helping Ted Cruz‟s presidential
campaign and he was using psychological data of millions of Facebook users to gain advantage
over his political rivals – which includes Donald Trump. In response to it Facebook said when it
know about the data leak it sought to ban Kongan‟s app and legally pressurized Cambridge
Analytica to remove all the data that they have gained improperly.

2016 – Donald Trump

Ahead of the U.S presidential election Trump‟s campaign team started investigating heavily on
Facebook ads.

March 17, 2018- Expose

In an explosive report published by The Guardian and The New York Times, it was revealed that around
50 million Facebook profiles were harvested for Cambridge Analytica in a major data scandal.
Christopher Wylie, Co – founder of Cambridge Analytica has revealed this matter to both newspapers.
He further add on that the data sold to Cambridge Analytica was then used to develop psychographic
profiles of people and also to deliver pro-Trump material them via online.
March 20, 2018 – FTC launch enquiry

The Federal Trade Commission (FTC) started investigating into whether Facebook had violated the
settlement with U.S government in 2011 with regard to privacy protections.

March 21, 2018 – Zuckerberg breaks his silence

He announced that Facebook would no longer allow app developers to have access to user data
and it would reduce the amount of information people are required to provide to third parties. It
also goes on for audit of all apps with access to chunks of data before 2014.

March 25, 2018 – Apology by Facebook CEO

Zuckerberg come out with full-page ads in various newspapers to apologize for “ breach of
trust”.

April 10, 2018 – Time to testify Zuckerberg were summoned for a joint hearing of senate
judiciary and commerce committees and he promises to take steps to make sure that such things
don‟t happen again
 REVIEW OF LITURATURE

1. Rishabh Tripathi , Cambridge Analytica Data Scandal (2018)

The article was about major political scandal in which Cambridge Analytica had harvested datas
of millions of people without their consent. This scandal resulted in huge fall in the Facebook's
stock price. It also thus demanded that there must be strict regulations for tech companies to use
data‟s of people. The data collected was further misused for targeted 2015 and 2016 political
campaigns for Donald Trump and Tred Cruz. Then it becomes important that there must be a
system where a minimum amount of data is collected from the users and also they must inform
the reason to the users for collecting the data.

2. Mark Scott, Facebook fined €1M over Cambridge Analytica Scandal (2019)

The author explains the levy represented the largest so far in connection to the misuse of user‟s
data. Italy's privacy regulator fined Facebook for the violations connected to Cambridge
Analytica scandal. The agency said that 57 Italians had downloaded an app called this is your
digital life, which was used for collecting information of the users as well as their friends.
Canadian authorities reported that Facebook had broken its rules in connection to the Cambridge
Analytica scandal.

3. David Carrol, Cambridge Analytica is dead, long live our data (2018)

The author says that he had requested his own data from the Trump campaign's data analytic
firm, Cambridge Analytica . He also states that even as it dissolves Cambridge Analytica
epitomises a distressing new era of digital colonialism. The next part is yet to come. Cambridge
Analytica argued that as he was a U.S citizen he is not entitled to U.K data protection rights .But
then a year later ICO disagreed, and states that Data protection Act of 1998 applies.
4. Julia Carrie Wong, Document reveals how Facebook downplayed early Cambridge Analytica
concerns (2019)

Author explains about Facebook‟s early knowledge about users potentially improper data
collection by Cambridge Analytica. The existence of internal discussion was reported by
Guardian in March 2019. And that reveals the that some employees were aware of this improper
data practices four months before the Guardian's 11 December 2015 article exposed them. Many
of them suspect companies are doing similar type of scraping and Cambridge Analytica is one of
them.

5. Ethan Zuckerman, This Is So Much Bigger Than Facebook (2018)

The author talks about Mark Zuckerberg's final acknowledgement of massive data compromise
that allowed Cambridge Analytica to obtain millions of user data from Facebook. In his non
apology, Zuckerberg claimed that Facebook has taken steps for preventing data leaks. But this
incident is only a simple part of a much bigger story.
MAIN ISSUE

Cambridge Analytica Ltd was a British political consulting firm which combined data mining,
data brokerage, and data analysis which helped in time of the election processes. The company
closed its operations after the Face book- Cambridge Analytica Scandal. Cambridge Analytica is
in the midst of problems after the undercover operation senior executives boasting about
psychological manipulation, fake news, entrapment technique etc.

In the recent weeks, the world has been closely patronage the Cambridge Analytica
revelations: large integer of Facebook users‟ personal data was taken without their consent , to
aid the campaigning of political conservative candidates in the year of 2016 election, which
include Donald Trump. It‟s not exactly a data breach where the public response towards this
incident.

Facebook is considered as the world‟s largest social network platform. Two billion of
customers are served globally. There are regular occurrences like data breaches, ransom ware
attacks and identity theft but, this event is entirely different. There is clear information that
majority of the Facebook users personal data was used in this campaign and used in this way.
This is the first time we have been victimized the mishandling of the social data on a mass scale
for the political purpose. This reminds the public to rethink how our personal data is used in
modern age. It is also unknown whether this experience may change privacy practices in
companies‟ and consumers‟ forever. However, facebook users and investors, American and
foreign governments, and numerous regulatory bodies are paying attention.
Ethical issues involved

 Privacy issues related with misusing of personal data of 50 million people.

Companies must conform to ethical rules of not displaying its customer‟s details
which are confidential in nature which the company misused.
 They have violated the company policy.
 Every company must be transparent in how they use the data which was violated
by Facebook.
 The data must be secured.
 Unsafe for the marketers who rely on Facebook core business model that is
deliberate individualised ads to the users can be exploited thus this raises an
ethical question about how data might have been used in influencing the
presidential campaign of 2016.
 Breach of trust.
 RESOLUTION OF THE ETHICAL ISSUES AND STEPS
TAKEN

Facebook was slapped with a 500000 pounds fine for its role in Cambridge Analytica scandal by
the UK‟s data watchdog. The information commissioner‟s office said Facebook has failed to
protect users‟ personal information by application developers access to their data without
sufficient consent, even if users had not downloaded the app. The social network was also
accused of making inadequate checks on apps and developers using its platform.

Facebook failed to sufficiently protect the privacy of its users before, during and after the
unlawful processing of its data, “said information commissioner Elizabeth Denham. “A company
of its size and expertise should have known better and it should have done better”.

The fine is the maximum allowable under the data protection laws that applied at the time the
incidents occurred and would likely have been far higher had they taken place after the
introduction of GDPR(General data protection regulation) ,which includes maximum fine of
17pounds or 4 percent of global turnover.

Facebook founder and CEO Mark Zuckerberg response to the Cambridge Analytica data scandal,
saying it will prevent further misuse by enacting restrictions on the use of personal data. He has
taken various steps to avoid this issue in future. Six main initiatives were taken by the company
to prevent accessing people‟s personal data without their authorization .The initiatives include:

 Reviewing all apps that have had access to large amounts of data on its platform and apps
with suspicious activity,
 Alerting people who have had their information misused through apps
 Turning off an app‟s access to users data if the person hasn‟t used the app in the last three
months
 Changing Facebook login data so apps can only see a user‟s name profile photo and
email address unless the app goes through a further review process
 Helping people manage the apps they use on Facebook and what information the apps
can see about them , and
 Increasing bug bounty program for people to report and get rewarded if they find
instances of app developers incorrectly using people‟s data
Lesson for others

As the dust settles and more details emerge about the Cambridge Analytica/Facebook data
privacy scandal, organizations all around the globe are reviewing their data collection and
privacy. While many users have tightened their security and privacy settings in the wake of the
announcement, there are still large numbers of public who are unaware that their data is being
used without the knowledge

There is real risk for stockholders

If you plan to use social media tool for gathering and monitoring feedback you need to be aware
of the vulnerabilities. The Cambridge Analytica case highlights the risks of relying on social
media platforms as a two-way communication channel - in this space data is a commodity, and
the platform (Facebook, LinkedIn etc.) does not share your goals and priorities. Dedicated online
engagement tools offer a more secure place for these exchanges.

The system can be gamed

We have seen firsthand how outside influences can manipulate information systems to a serious
extent, influencing decisions and policy direction. Community engagement professionals need to
remain vigilant, and always scrutinize the data they gather for potential manipulation. Many
practitioners have had to do this in the past to help control for over-zealous or vocal minorities -
if it looks out of the ordinary, investigate further. Interestingly, these risks can be drastically
reduced by having the same conversation in a purpose-built digital space

That privacy should be "opt-OUT" not "opt-IN".

All users of a platform should have the basic guarantee that their data is safe, secure, and not
used for any other purpose other than the clearly stated one. Recently, we've seen how
companies and platforms have abused this, and hidden security and privacy setting behind
complex menus or buried in Terms and Conditions. All this does is frustrate users and push them
away from giving feedback.
Users can be easily misled, and might not know what they are contributing to or giving
away.

Community engagement practitioners need to be proactive, and provide stakeholder and the
public-at-large with a clear picture of where they fit into the process. Providing easy to
understand instructions, and straightforward lists of what negotiable are actually on the table
helps to build trust and ensure your stakeholders understand where they fit in.
Conclusion
Going forward, businesses will increasingly need to have a social media product and platform
that can be updated rapidly and reliably in order to maintain consumer trust and to deliver a
valuable personalized experience in exchange for data.

If businesses dealing with social media data take away one lesson from the Cambridge Analytica
scandal, it should be the urgent need to move to a more authentic and transparent model with
customers at the heart of the process and never as an afterthought.
 BIBILIOGRAPHY

https://en.m.wikipedia.org/wiki/Cambridge_Analytica

https://en.m.wikipedia.org/wiki/Facebook%E2%80%93Cambridge_Analytica_data_scandal

https://www.businessinsider.com/mark-zuckerberg-3-steps-facebook-cambridge-analytica-scandal-
2018-3

ANNEXURES