Governance of the Facebook Privacy Crisis

20 Pittsburgh Journal of Technology Law & Policy (2020)

107 Pages Posted: 4 Jun 2019 Last revised: 3 Apr 2020

See all articles by Lawrence J. Trautman

Lawrence J. Trautman

Prairie View A&M University - College of Business

Date Written: March 31, 2019

Abstract

In November 2018, The New York Times ran a front-page story describing how Facebook covered up knowledge and disclosure of Russian-linked activity and exploitation resulting in Kremlin led disruption of the 2016 and 2018 U.S. elections, through the use of global hate campaigns and propaganda warfare. By mid-December 2018, it becomes clear that the Russian efforts leading up to the 2016 U.S. elections were much more extensive than previously thought. Two studies conducted for the United States Senate Select Committee on Intelligence (SSCI), by: (1) Oxford University’s Computational Propaganda Project and Graphika; and (2) New Knowledge, provide considerable new information and analysis about the Russian Internet Research Agency (IRA) influence operations targeting American citizens.

By early 2019 it has become apparent that a number of influential and successful high growth social media platforms have been used by nation states for propaganda purposes. Over two years earlier, Russia was called out by the U.S. intelligence community for their meddling with the 2016 American presidential elections. The extent to which prominent social media platforms has been used either willingly or without their knowledge by foreign powers continue to be investigated as this Article goes to press. Reporting by The New York Times suggests that it wasn’t until the Facebook board meeting held September 6, 2017 that board audit committee Chair Erskin Bowles became aware of Facebook’s internal awareness of the extent to which Russian operatives had utilized the Facebook and Instagram platforms for influence campaigns in the United States. The degree to which the allure of advertising revenues blinded Facebook to their complicit role in offering access to Facebook users to the highest bidder is not known at this time. This Article will not be a complete chapter in the corporate governance challenge of managing, monitoring, and oversight of individual privacy issues and content integrity on prominent social media platforms. The full extent of Facebook’s experience is just now becoming known, with new revelations yet to come. All interested parties: Facebook users; shareholders; the board of directors at Facebook; government regulatory agencies such as the Federal Trade Commission (FTC) and Securities and Exchange Commission (SEC); and Congress, must now figure out what has transpired and what to do about it. Senator Warren’s presidential campaign has also placed billboards visible to the commuter trains traveling from San Francisco to the heart of Silicon Valley reading, “Break Up Big Tech.” Hers is just one voice in a growing chorus of political leaders reacting to privacy demands from constituents framed as an antitrust remedy. These and other revelations have resulted in a crisis for Facebook, the leading global social media platform. American democracy has been and continues to be under attack. This article contributes to the literature by providing background and an account of what is known to date and posits recommendations for corrective action.

Keywords: Cambridge Analytica, congressional oversight, consumer surplus, controlling shareholders, corporate governance, crisis, data mining, dual class shares, fake news, Google, hate speech, Internet, national security, risk, Russian election meddling, social media, surveillance capitalism, terrorism

JEL Classification: D72, D74, G32, G34, J15, K00, K10, K11, K12, K13, K20, K22, K36, K49, L82, L86, M3, M31, M37, M38

Suggested Citation

Trautman, Lawrence J., Governance of the Facebook Privacy Crisis (March 31, 2019). 20 Pittsburgh Journal of Technology Law & Policy (2020), Available at SSRN: https://ssrn.com/abstract=3363002 or http://dx.doi.org/10.2139/ssrn.3363002

Lawrence J. Trautman (Contact Author)

Prairie View A&M University - College of Business ( email )

Prairie View, TX
United States

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