Facebook Violation of User Privacy Gets Exec Grilled at US Congress

U.S. lawmakers grill Facebook CEO Mark Zuckerberg over privacy issues. Who or what could keep social media users' data from falling into the wrong hands? And who are the wrong hands? Our panel weighs in right after this break. Welcome back. You're still watching World Insight with me, Tian Wei, coming to you Monday to Friday on CGTN. Facebook CEO Mark Zuckerberg has finished the 2-day congressional inquiry at Capitol Hill. He answered many tough questions from U.S. senators as he seeks to reassure lawmakers, the financial markets, and users about online privacy concerns. The social media giant is facing criticism after it was reported that data from as many as 87 million Facebook users was transferred without consent to Cambridge Analytica, a British political consulting firm used by the Trump 2016 presidential campaign. The CEO said he'd be open to some sort of regulation to protect the privacy of Facebook users, and he also revealed that his own data was part of the breach. Some U.S. lawmakers insisted that new laws should be put into place to regulate Facebook and other social media platforms. So how vulnerable is social media like Facebook to data poachers? Is it the end of digital privacy as we know it? What's next? Let's turn to our panelists. Here in Beijing, we have James Sun, who is the chief strategist of Zoka Strategic Marketing. Welcome, sir. In Washington, D.C., we invited Ernest McDuffie, founder and CEO of Global McDuffie Group. Good to see you, Mr. McDuffie. In Boston, we have Robert Siciliano, a security analyst at Hotspot Shield. That's a virtual private network utility, protects users on Wi-Fi. Gentlemen, I want to welcome the three of you. Big topic always when it comes to Facebook, this time particularly. Mr. MacDuffie, you have been a guardian of data security, but at the same time you say much space should be given to these high-tech companies. But it seems things are getting ever serious. Mr. McDuffie, your take. Should be more regulation?

So there's clearly a big problem here. This idea of privacy continues to evolve, and the idea of safety and protecting individual information is evolving as well. I think the congressional hearings with Zuckerberg were a positive step.. And the idea that you're going to have to do some kind of regulation down the road, I think, is inevitable.

What kind of regulation? Can you be just a little bit specific?

So I think particularly in view of the 2016 election, the idea that the type of social media platforms like Facebook and Twitter are actually broadcast journalist platforms, that there's news coming across those platforms There's some that believe that those platforms should be regulated the same way news organizations are regulated.

Okay, that's one thing. Mr. Siciliano, there are other things too. Whether those data coming from the Facebook users, while Facebook has control of it, should be, you know, brought to the others or being sold to the others, like the advertisers, or in a way be breached. By the others. Here's the thing. So, Mr. Siciliano, your take. Where should the direction of the regulation go?

So the regulation currently is relatively nonexistent. Facebook, Instagram, Twitter, they pretty much do what they want at will with this data. Whereas when you look at companies like phone companies, right, AT&T, you look at credit card companies, Visa, MasterCard, American Express, these are highly regulated industries and they actually have as much, if not much more information on us, but they can't do as much with it due to all of that regulation. Therefore, if social media companies fall under the same guise, the same regulation as phone companies, credit card companies, financial companies and so forth. I think that'll certainly tighten up social media companies and prevent them from sharing too much information.

All right, even though the regulation could be different in a different format because it is high-tech companies, but Mr. Sun, should they be regulated just as telecommunication companies are being regulated, as suggested by Mr. Siciliano?

Well, I mean, regulation to an extent is necessary, but I think it's It's been proven already through the 2 days of hearing that they simply don't understand how to regulate it. You know, they don't even understand the basic options that are being offered in Facebook because they're not users themselves. And I mean, it's really, you know, as a marketer myself, Facebook is a gold mine. It's a great sales tool for us. People are not going to go back to billboard advertising, newspaper advertising. It just doesn't make any sense. I mean, this is the wave of the future and we just really need to embrace it.

Okay, Mr. Sun is saying— Mr. McDuffie, okay, this is gold mine for us. If the regulator don't know how to regulate, then just let it be. Let this be no regulation. Is that what you are having in mind, Mr. McDuffie? That could be a gold mine to you too.

No, no, not at all. I think we have to have some kind of regulation. Certainly, I understand from the marketing perspective, the gold mine that Facebook represents, and the fact that I think he's absolutely correct that not only does the Congress not understand, but the typical user, particularly in the United States, doesn't have a clue as to the extent of the information that's being gathered on them or how it's being used. So, you know, there are a couple of options as a user. You can opt out. To not use those kind of social media platforms and just go back to the way it was before they existed. I mean, we communicated and marketing reached us before there was social media, and people like myself who tend to stay off of social media altogether still see marketing and get affected by that. The bottom line would be if they regulate it to the point where it becomes the business model for Facebook is that they can't do free subscriptions because the marketing piece is being limited, it's just going to become a pay-for service as opposed to a free service.

Is there anything wrong if they become a pay-for service, Mr. Siciliano? Those phone companies, if you want to still use your own analogy, have been labeled as paid service, right?

I don't see— Facebook ever going to a paid service. I, I think that what, um, the public doesn't quite understand, nor does Congress, even regulators to any degree, is that what is being done with this data, uh, the theme here is what's called psychometrics. Uh, it is psychological assessments that are being created, uh, as a result of all this data being collected. And millions of users have voluntarily coughed up that information when they are engaging in various applications and studies and quizzes and so forth. And all of that personality and assessment and so forth that's being gathered has taken sales and marketing to a whole 'nother level. And this is the evolution of advertising, as has been previously suggested, and it's a normal way or a successful way for companies to spend their money. There's a significant ROI here.

Yeah.

And getting used to that, these psychometrics, is going to take an entire generation to accept.

Okay. Mr. Sung, here's the thing. Do the users have any choice? Or do they know the kind of choice that could be available to them besides they have to tapped out from the overall use of Facebook, which is such a powerful platform that almost everybody is on it, and this is a way to get your things out. Mr. Sun.

Well, it's funny because—

It's not funny. To the users, it's not funny at all. Our information is there. They got everything about us.

Facebook is being singled out. I mean, all the big companies have all these legal terms and conditions that nobody ever reads. I mean, Facebook gives you all these options, you know, like maybe 100 different options that nobody ever looks at. And, you know, you just—

Do you look at it? Do you look at it yourself?

I don't even look at it myself.

Why don't you look at it? Tell me, as a user, why don't you look at it?

Because, you know, I'm American. Americans are lazy.

Come on, don't use that kind of analogy.

Let me use this analogy then. You know, I would rather have Facebook for free rather than pay for it. Facebook right now is— I read a statistic in the United States alone, it's about— they make about $80 advertising revenue per user. In Europe it's over $20, and this is per month, and in Asia it's over $8. So on average it's about $20, and you know, if you were to ask an American user, Would you rather have it for free or would you pay $80? I mean, there's no question.

Well, there is the question, I guess, Mixon Mike Duffy, if they're saying, well, you can have it free of charge, but at the same time your information is going to go to all kinds of hands that you're not aware of. I'm sure the user is going to be able to make their different choice, Mixon Mike Duffy.

Yeah, so I don't have a problem with the marketing and the people that are trying to sell us things.

Mr. Song, Mr. McDuffie has a big problem with you.

Go ahead, Mr. McDuffie. The problem comes in with the psychometrics is when it becomes weaponized. The whole purpose of the art of marketing is to affect behavior. For companies that are selling things, you know, that's okay. We're trying to change your mind to buy X product versus Y product. But those same psychometrics, that same data can be used to change your mind over who you vote for, who you don't vote for, what you think is fake news, what you think isn't fake news. And if you don't regulate that, you know, nefarious actors can manipulate that, weaponize that information any way they want.

Okay, Mr. Siciliano, let's just be fair. We understand business needs its space to grow, and the consumers also have their right to privacy. Well, at the same time, the government and the regulators should play an appropriate role when it comes to the future growth of the market and prosperity of the economy. But here's the thing: are we lacking of a balance right now? Is it mainly the business which is trying to get whatever it can get on hand while the private citizens and the users do not have much in hand to protect their own rights, while at the same time the government seems to be not necessarily understand all the latest development to play the appropriate role of a regulator. Mr. Siciliano.

We definitely need a balance. The weaponization of this data has already taken place, and it will quickly spin out of control over the next 3 to 5 years unless the companies themselves are called on the carpet as Zuckerberg has been thus far and they either self-regulate or they in some way, shape, or form are effectively regulated. The public, you know, they're relatively clueless when it comes to how their data is being used to manipulate them, and they will always be relatively clueless because they're not, you know, interested in maintaining privacy the way privacy professionals are, or even security the way security professionals are. They just are overwhelmed and busy and, like has been previously said, somewhat lazy and security and privacy being manipulated is just not top of mind for them. And so that's why you have government to step in to say, okay, enough is enough, you can't keep doing this, because our people just aren't, uh, intellectually, I guess, capable or aware enough, uh, they don't have the fortitude to do something about it on their own. That's where the government steps in, right?

You cannot expect everybody who is buying the pork from the market to know where the source of the pork is and have the pork examined for all the important measures. You can't expect individuals to do that. That's true for every kind of product. It should be true for information as well. Mr. Sun, you are laughing at my analogy. Tell me why you're laughing at it and why do you disagree with me, Mr. Sun?

Well, you know, I have something that's known as common sense.

Okay, what is your common sense?

You know, I understand that a Nigerian prince is not waiting to give me money, to wire me money, you know, and there's a lot of people, and the reason why these scams on the internet still exist today is just because some people continue to fall for it even though it's like 15 years, you know, these scams. There's an obvious difference between Mr. McDuffie's age and my age. We're different generations. And people grew up on Facebook and—

Well, you just made a big mistake, Mr. Sun. We are saying you have a huge generational gap with Mr. McDuffie, I have to say. Mr. McDuffie has been working on the security issue for quite some time. By the way, Mr. Sun, Mark Zuckerberg admitted himself that he's data has also been stolen. So are you saying you are not of the same generation with Mark Zuckerberg either? He is not as sophisticated when it comes to technology as you are? Well, I'm not sure about that, but let me have Mr. McDuffie to respond to you. Mr. McDuffie, your role here.

So, so yeah, the, the idea that the general public is not sophisticated enough to handle the types of attacks that they're being subjected to is absolutely true, and it is a generational thing, you know, and the bad actors are capable of tailoring the type of attack they have to the type of market that they're looking for. It's all part of the weaponization. There are some very sophisticated phishing attacks out there that make you think you're dealing with a legitimate organization and force you to do things that you really wouldn't normally do. —in terms of information that you're going to give up and provide. So it's a big problem.

Okay, if we know it's a big problem, who's going to regulate it? Mr. Siciliano, obviously the senators that were at the hearing are not necessarily experts in it, but there are experts they could take advantage of. For example, with a technical assistance or assessment office or something like that, which was already closed back in the 1980s, to be able to do research and come up with some some suggestions. Mr. Siciliano, what would be this way for the U.S., and do you think it could have an impact on the rest of the world?

So there are a number of privacy advocates out there, both funded by federal grants, others nonprofits and so on, that definitely have a say and would definitely have a of input. I actually, crazy as it sounds, I believe that Mark Zuckerberg, that Facebook as a whole is remorseful at this point. I do think that they were somewhat caught by surprise. I also believe that they knew a little bit more than what they're alluding to. That said, I think that internally that they will begin to self-regulate and reach out to others in Silicon Valley. And come up with something effective. You know, this— Zuckerberg's young, and, uh, you know, for the next, you know, 30 or 40 years, uh, I think that, uh, he will rein in his own company and work with others to self-regulate and propose something to government that would be a blueprint going forward.

Even though we have heard previous cases that Facebook was being questioned and they were suggesting they were doing doing self-regulations. That has been done, quote unquote, for several times already. But having said that, you know, we cannot reach a conclusion for now. But for now, I can certainly thank the three of you for coming to this discussion: James Sun, Ernest McDuffie, and Robert Siciliano. Really appreciate it. Thank you so much, gentlemen, for being with us, and have a great weekend. And that is all the time we have for today. If you'd like to see more, try to find us, World Insight CTTN, into your search engine or check out our YouTube channel. You can also Follow us on Twitter, Facebook, and Sina Weibo. From me, Tian Wei, and everyone on the World Insight team, thanks for watching. Tune in again next time for insights across China and around the world. Have a great weekend, everyone.