Data Breach: How will the biggest scandal that Facebook is mired in affect its credibility in India?

The article by G. Seetharaman and Shephali Bhatt with additional inputs by Indulekha Aravind was published in the Economic Times on March 26, 2018. Sunil Abraham was quoted.

Rebuked for the misinformation spread on its platform by Russian agencies during the 2016 US presidential election, aiding Donald Trump’s victory, Facebook was on the defensive for most of 2017. Making matters worse for the Menlo Park, California-headquartered social media behemoth, another one of its past oversights has now come back to haunt it in what is undoubtedly its biggest public relations challenge.

Reports by the New York Times and the Observer of London on March 17 disclosed that a researcher linked to Cambridge Analytica (CA), a political consulting firm that worked on Trump’s campaign, had accessed details of 50 million Facebook users unbeknownst to them and shared it with CA, which uses online data to reach voters on social media with personalised messages. The reports were based on revelations by whistle-blower Christopher Wylie, who had worked with CA.

This is how it unfolded: in 2014, CA hired Aleksandr Kogan, a Soviet-born American citizen, to mine data on US voters on Facebook, through a personality quiz app. It was downloaded by 2,70,000 users, who logged in with their Facebook credentials. That enabled Kogan to access not just their data on Facebook, but also their friends’ profiles. Facebook says Kogan lied that the data was only for his research, while there was a commercial element to it as CA paid for the app. It is unclear at this point how exactly the data was used or whether it was effective.

In 2015, Facebook removed his app and sought an assurance from him that the data had been destroyed. But it later found out that the information had been passed on to CA. Facebook has since stopped apps from accessing information about a user’s friends and has even limited the data that can be collected about the user.

While the broad details of the issue have been known since 2015, the sheer number of accounts that were compromised was not known till now and has led to calls for Facebook to be deleted, with #DeleteFacebook trending on Twitter. The company, one of the world’s most valuable public companies, has shed $75 billion, or 14% of its market value, since March 16.

As Facebook spends the next few months trying to convince its users that their data is safe, India will be crucial to their plans. India is, after all, its largest market, with 250 million monthly active users, 12% of its global base, according to recent data by We Are Social and Hootsuite, firms involved in social media marketing and management, respectively.

There are other reasons why India is important to Facebook: WhatsApp, the country’s chat app of choice, has 200 million users, again more than any other market, and Instagram has 53 million. Both these apps are owned by Facebook, giving the company an outsize role in how Indians communicate.

Facebook will only grow as smartphone and internet adoption grows — India is set to add 100 million internet users and 250 million smartphone users by 2020. But at the same time, it has to deal with those wondering whether they should sign up or continue being on the network.

Soumya Sinha, a 32-year-old data consultant in Delhi, says FB is quite passive-aggressive when it comes to data. “It gives you a lot of privacy options, makes you feel you are in control of your wall, but buries an ‘unless you don’t want to share’ option at the bottom,” he says. “If you don’t opt out, it assumes you are happy to share. Even if you do, you can never be sure the non-consensual sharing has stopped.”

Privacy controls — not just on Facebook but on social media platforms in general — are not easy to find and even the most tech-savvy have a hard time ensuring the accounts are as secure as they can possibly be. “Indians are very liberal with others accessing their data. A lot of other accounts are linked to my FB account. Who knows which one of them will provide my data to others?” says Prateek Kharangar, a 30-year-old doctor in Rajasthan.

Mark Zuckerberg, Facebook’s billionaire chief executive, issued a statement on March 21 admitting that Facebook had made mistakes. He added that Facebook would do a thorough audit of suspicious apps and make its privacy policy stricter by limiting the user information it shares with third-party apps.

Facebook will also revoke permission to apps that a user has not accessed for three months and show an option at the top of the news feed, allowing users to do the same. Zuckerberg also said in a subsequent interview to the New York Times that Facebook would let concerned users know about the CA debacle. Questions sent by ET Magazine to Facebook India went unanswered. The US Federal Trade Commission and the European Union are also scrutinising the issue.

Protect Data
Facebook has faced criticism in the past, including about its facial recognition software In India, it was badly bruised in its fight against net neutrality. Its Free Basics campaign tried to push free access to a few websites, including its own, in partnership with telcos, but the telecom regulator in February 2016 ruled in favour of net neutrality. Sunil Abraham, executive director of the Centre for Internet and Society, believes sites like Facebook should periodically inform users about the data the apps have access to. “Facebook should also ask you every quarter if you want to revoke permission. It’s required in countries where users are naive, unaware and incapable of protecting their own interests.”

Many experts call for more transparency and clarity. Nayantara Ranganathan, programme manager at the Internet Democracy Project, says privacy policies are tweaked constantly and the changes the companies want us to know about are conveyed through blog posts and such, while there may be changes that we may not be aware of. Nikhil Pahwa, cofounder, Internet Freedom Foundation, says the process of notifying users of changes in terms and conditions needs to be improved. “So often, T&Cs are changed and the company just sends a generic mail to all its users. If they don’t respond, it is assumed they have agreed to the changes. That needs to change.” Some believe online consent agreements are being simplified.

While there have been calls for the privacy notice to be in local languages too, Rama Vedashree, CEO of Data Security Council of India, says that in markets like India, where millions are just being introduced to the internet, websites may have to look at pictorial representations to explain how user data will be used by third-party developers. Regardless of how intelligible tech companies make their privacy policy documents, given the number of websites we use, it is impossible to read every site’s terms. That is where a stringent law becomes necessary. “We don’t have a robust legal framework that acts swiftly, permits class action lawsuits and awards damages in tune with the harm incurred,” says Mishi Choudhary, legal director at the Software Freedom Law Center.

WHY FB CAN'T TAKE DATA SECURITY LIGHTLY IN INDIA

Source: Facebook, WhatsApp, We Are Social and Hootsuite, Ministry of Communications, Internet and Mobile Association of India

Abraham says presently only data security is covered under the Information Technology Act, 2000. “A mere infringement of your privacy without financial loss does not allow you to seek remedy.” However, India could have a data protection law sooner than later. A committee was appointed by the government last year to come up with a draft law, an important part of which will be a data protection authority. The Supreme Court, in a landmark ruling last year in a case related to Aadhaar, said privacy is a fundamental right.

The European Union’s General Data Protection Regulation (GDPR), which will come into effect in May, could be emulated in countries, including India. It makes tech companies more accountable for the privacy of those who use their services and has penalties up to £20 million, or 4% of the errant company’s global annual revenues, whichever is higher. This forced Facebook to put all of its privacy settings in one place in January.

“India must go further than Europe did with its General Data Protection Regulation, which requires companies to get unambiguous consent from users to collect data, to clearly disclose how personal data are being used, and to spell out why data is being collected. It must also ban any form of political advertising and the sale of data to third parties,” wrote Vivek Wadhwa, a tech entrepreneur and academic, in a column in ET on Friday.

In light of this controversy, there will be pressure on the government to hasten the process of introducing a data protection law, accompanied by a regulator. It is likely the draft document will draw on the European regulation. “The more we adopt from EU GDPR, the better,” says Pahwa, adding that users should also have the right to removal of personal data.

Ravi Shankar Prasad, India’s IT and law minister, has warned Facebook of stringent action if it is found influencing elections “through undesirable means”. The Indian government on Friday issued a notice to Cambridge Analytica asking if any entities engaged its services to harvest data of Indian Facebook users.

India could also take a leaf out of Germany’s playbook while enforcing data protection, especially if it involves tech companies that dominate the segment they operate in, like Google in search and Facebook in social media. Germany’s competition watchdog in December accused Facebook of abusing its dominant position to get users’ consent to access their data from third-party websites. The Competition Commission of India in February imposed a penalty of `136 crore on Google for abusing its dominant position in search to create a bias to favour its own services.

Messing Up Elections?
The ongoing controversy has been exacerbated by the fact that besides data privacy, electoral politics is at the centre of the issue. CA dug itself into a deeper hole when footage emerged of a UK television channel’s sting operation, in which the company’s top officials talk about using bribes and women to entrap their clients’ political opponents. CA has since suspended its chief executive, Alexander Nix, who was in the video. CA is partly funded by conservative US billionaire Robert Mercer, and Trump’s former White House chief strategist Stephen Bannon served on its board.

The issue has had political ramifications in India, with both the ruling Bharatiya Janata Party and opposition Congress trading charges about each other’s association with CA. The BJP has attacked the Congress by quoting news reports of talks between CA and the Congress ahead of the 2019 general election, while the Congress has hit back with a reference to the 2010 Bihar election on the CA website. The company claims that it worked on the Bihar election, reportedly through its parent Strategic Communication Laboratories, by identifying swing voters.

“Our client achieved a landslide victory, with over 90% of total seats targeted by CA being won,” says the website. The JD(U)-BJP combine was the victorious coalition. Interestingly, the company’s India partner, Ovleno Business Intelligence, is run by Amrish Tyagi, son of JD(U) leader KC Tyagi. When contacted by ET Magazine, Amrish Tyagi declined to comment. Both the Congress and the BJP have denied any ties to CA.

“We have been on social media as long as social media was around and we have always been ethical in our conduct,” says Amit Malviya, head of BJP’s IT Cell. Divya Spandana, who heads the social media team for the Congress, says the party does not engage external agencies. “We only use data with the consent of the individual, emails are subscribed to and WhatsApp is through people who have signed up to receive messages.” The BJP made good use of social media in its 2014 campaign, and Prime Minister Narendra Modi and most of his cabinet are quite active on Twitter.

Facebook, Twitter and WhatsApp will play an even bigger role in the upcoming assembly polls and the 2019 general election, WhatsApp perhaps more so than the other two, given its popularity and user engagement. “What makes WhatsApp worse than Facebook is Facebook knows what’s being sent around (on its platform). If it comes up with a fake news mitigation strategy, it might work. WhatsApp doesn’t know what’s being sent on its platform,” says Abraham.

In his New York Times interview, Zuckerberg said that after the US presidential election, Facebook developed artificial intelligence tools to identify fake accounts and fake news, which were deployed during the French presidential polls in 2017. “This is a massive focus for us to make sure we’re dialed in for not only the 2018 elections in the US, but the Indian elections, the Brazilian elections, and a number of other elections that are going on this year that are really important,” he was quoted as saying. Both government authorities and the Election Commission of India will keep a close watch on how social media is used in poll campaigns.

While things do not look up for Facebook in the immediate future, some think it will get past the issue. Vineet Sehgal, chief marketing officer of Quikr, says while marketers will take a hard look at Facebook, the company will act swiftly to change its policies.

"There is too much at stake." More and more Indians are using social media, in addition to searching for information on the internet, buying things on ecommerce sites, booking app-based cabs, and making payments and transfers on online payment platforms. They will also buy more devices, including wearables and smart speakers, which gather large amounts of data. So naturally, it is imperative that the sanctity of that data become a top priority for tech companies, consumers and the government. "The emphasis of any (data protection) law needs to be protecting people, not data. Our legislators should ask about relationships of all entities with social media and data analytics companies," says Choudhary of Software Freedom Law Center.