Privacy Concerns Surface As A Huge Business Jeopardy For Facebook
Facebook encounters considerable business risks from new privacy rules of European Union set to be live from May. This is a threatening reality that came into existence over the weekend with exposures that a contentious political consulting company had inappropriately got personal information of more than 50 Million users on Facebook.
Privacy analysts claimed on the revelation that a researcher had traded Facebook information to the consulting firm Cambridge Analytica gathered through a personality quiz. This is a prime instance of the types of practices that the new GDPR (General Data Protection Regulation), is supposed to punish or prevent.
The danger encountered by Facebook moving forward is two-fold for: Breaking GDPR rules can subject the California firm to penalties of almost 4% of yearly incomes. Obeying with the regulations means allowing European consumers opt out of the highly aimed online ads that have converted Facebook in to a money-making machine.
“If this incident taken place after GDPR comes live on May 25, 2018, it might have cost the social media behemoth 4% of their yearly income”, claimed Max Schrems, Facebook critic and Austrian privacy campaigner, to the media in an interview. Since a U.K. firm was present and because at least some of the users whose information was misrepresented were most likely European, GDPR might have implemented.
Shares in the social media giant dropped this week by 7%, their largest fall ever since 2014, almost wiping $40 Billion off the value of the company established by Mark Zuckerberg in 2004.
Schrems first lifted issues in 2011 about how simple it will be for 3rd-party applications to harvest information from Facebook users’ unwitting friends. Facebook claims that it has tensed up its controls on such means since it found the suspected mistreatments in 2015 by Cambridge Analytica, as per the media reports.