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Data privacy and security remain ongoing challenges for Facebook, across its messaging and social portfolio. The social giant is rolling out end-to-end encryption (E2EE) across Facebook Messenger and Instagram (WhatsApp already has E2EE), but its recently-filed lawsuit against Israeli surveillance software vendor NSO Group signals that Facebook will act against infringements that may weaken or bypass its E2EE. This is a show of force from Facebook. The suit alleges that NSO's Pegasus platform was used to install eavesdropping malware (via WhatsApp) on around 1,400 devices belonging to human rights activists and journalists. NSO has denied the allegations.

Facebook's lawsuit against NSO sheds more light on the dingy underbelly of data privacy and security. Assuming Facebook's case against it is proved, it's almost certain that NSO is not the only vendor whose software can be used to break into Facebook's E2EE systems. It's just that NSO is the only one that Facebook knows about, so far. It's a similar story with Cambridge Analytica, the company that in 2016 obtained the personal data of millions of Facebook users without their consent and used it to target political advertising. Former Cambridge Analytica employee turned whistleblower, Christopher Wylie, published a book in October 2019 detailing how the Cambridge Analytica scandal unfolded, and its influence on global political events – the most significant being the 2016 UK referendum on leaving the EU, and the US presidential elections later that year. In the book, Wylie also warns of similar, undetected, and ongoing threats from companies other than Cambridge Analytica.

In response, Facebook is introducing technologies and policies that give users more transparency over their data and control over how it is used. Next up is the Off-Facebook Activity tool, which tells users what information about them Facebook shares with other websites for targeted advertising purposes, and allows users to turn off data sharing, and disconnect browsing data. Providing this tool helps Facebook to be GDPR-compliant, but Facebook is also hoping that its users will still be willing to share their data with it, by providing users with more control over how their data is used. However, it also means Facebook could lose advertising revenue because it won't be able to target advertising as effectively. Facebook is showing regulators and consumers some contrition; the company certainly can't afford to pay the US Federal Trade Commission too many $5bn fines (a figure which represented 9% of its total 2018 revenue), as it did in July 2019.

 

Figure 1: More online consumers are using social networks less due to privacy concernsMore online consumers are using social networks less due to privacy concerns

Source: Ovum's Digital Consumer Insights 2019 Analysis: Consumer AI

  

Facebook's user base continues to grow, seemingly unimpacted by the Cambridge Analytica scandal. In 3Q19, daily active users grew 9% year on year to 1.62bn for Facebook alone, and 10% year on year to 2.2bn across Facebook, Messenger, WhatsApp, and Instagram. But Ovum's Digital Consumer Insights 2019 Analysis: Consumer AI shows concerns over data privacy has prompted a high proportion of online consumers to use social networks less (45%) or to stop using them altogether (12%) (see Figure 1). Clearly the #DeleteFacebook movement has had limited success. Either Facebook users value its services so much that they don't really care what happens to their data or how it's used, or Facebook is doing just enough to placate its users' concerns.

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