What's issue at center of Zuckerberg congressional hearings? Securities lawyer explains
Mark Zuckerberg's Congressional hearings over Facebook's privacy scandal with Cambridge Analytica begin this week. Metro checked in with a securities lawyer.
Mark Zuckerberg will testify before Congress this week concerning a privacy scandal in which 87 million Facebook users’ data was shared with Cambridge Analytica, a political consultancy firm hired by the Trump campaign.
The data collected included information on people’s identities, friend networks and likes; info that was used to target audiences with digital ads. Since the privacy scandal, Facebook says it will take some steps to give users more control over their privacy settings as well as what ads you see, but Zuckerberg still needs to face the U.S. Senate Judiciary and Commerce committees and the U.S. House Energy and Commerce Committees.
Metro spoke with Andrew Stoltmann, a trial attorney and adjunct securities law professor at the Northwestern’s School of Law, about the legality of this situation.
What is the legal issue at the center of Mark Zuckerberg's congressional hearings?
The main issue deals with what happened in the data breach and what steps Facebook takes to protect that data. Zuckerberg has already tried to get in front of these issues by throwing his support behind the Honest Ads Act which would hold social media platforms such as Facebook to the same political advertising rules as TV, print and radio. It has not yet been passed into law.
For the 87 million Facebook users who had their data harvested, is there any legal recourse they can take?
There are over a dozen class-action lawsuits. But historically those data breach cases have led to minimal settlements and payments for users. I would expect the same in the cases against Facebook.
Has any other company had a legal issue on this scale and does this spell “the end” for Facebook?
Many other companies have had data hacks and have survived. Target is the classic example. But Facebook is so unique in that it relies on users sharing data to create the Facebook experience. Facebook will survive this given the profitability of its advertising platform. But it is a serious PR hit that has shaved off billions from the valuation of the company.
What happens after the hearings, for Zuckerberg, Facebook and the users affected?
That is the $64,000 question. It is the reason why Zuckerberg’s testimony is so important. If he aces it, then Facebook can begin to move past this scandal. If he bombs it and he does like he did in the 2010 Wall Street Journal interview where he was heavily sweating, it will be a disaster for the company.