There's something "rotten" in the state of Facebook, and it's tied directly to the company's core business model, according to a former Federal Trade Commission advisor.
Professor Tim Wu of Columbia Law School, who helped the FTC settle its dispute with Facebook over its handling of user privacy in 2011, said the social network is busy serving "two masters" -- advertisers and its massive audience. The disconnect between the two has made user privacy an afterthought in Facebook's efforts to build an advertising behemoth, according to Wu.
"The fact is that privacy, it's like kryptonite to their business model," Wu told NPR on Tuesday. "[Facebook has] to be able to promise their advertisers they have the goods on everyone and they have the power to manipulate people. So if they're tight on privacy, that tends to throw a wrench into the machine."
Facebook has been playing fast and loose with user data for a number of years, the professor argued. The FTC cracked down on the company over its "unfair and deceptive" privacy settings in 2011; Facebook agreed to ask for user permission when changing its privacy settings moving forward, and was subject to 20 years of FTC audits.
Facebook's handling of user data has been called into question in the last two weeks, in the aftermath of the Cambridge Analytica leak -- where 50 million users unwittingly had their profiles harvested by the political data firm. The company's slow response time -- waiting to suspend the firm for years, and failing to notify users that were impacted -- could violate its agreement with the FTC, according to Wu. At $40,000 per violation, the financial ramifications could be devastating to Facebook.
Facebook chief executive Mark Zuckerberg publicly acknowledged the leak last week for the first time, and outlined several measures the company would take to better protect user data.
"We have a responsibility to protect your data, and if we can't then we don't deserve to serve you," said Zuckerberg.
Another concern, as Arts Technica argued over the weekend, is that Facebook logged the call and text history of Android users for years -- even when some believed they had opted out.
"There's a number of abusive apps and they dig a lot more of your data than you thought they were. One of the big problems is Facebook gave you the impression you could control your own privacy by setting your settings in certain ways -- but those settings didn't do anything," said Wu. "They were like fake buttons."
Wu argued "at the heart of [Facebook] is something rotten" -- a desire to be the biggest company in the world while handling the sensitive information of two billion users (and counting). So what's the fix? Wu said if Zuckerberg's mission is to truly connect the world, Facebook should be considered a social utility, where ad revenue isn't the driving factor in its decisions. Storing data is like handling "radioactive waste," said Wu, and it should be regulated accordingly.
The professor concluded, saying he thinks the company needs new management -- but don't hold your breath on that one. Zuckerberg built the company into a cash cow, something investors won't soon forget, and he controls so much voting stock, you couldn't remove him anyway.