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The political and media furore over external use of Facebook data misses the point. Facebook, Google and other internet giants know far more about their users than any app developer ever will. Facebook offers its own political ad-targeting service based on its analysis of users' data, just part of its over US$40bn of annual monetisation of users through advertising. It's a price that users appear willing to pay for the services, but in authoritarian states like China, with it's pending "Social Credit System" that poses a far bigger threat to society.

Facebook, Big Brother and China
23 March 2018

There's been a lot of renewed global coverage in the last few days of how data on about 270,000 Facebook users of a psychological profiling app, and 50 million of their friends, was collected by a Cambridge University psychologist, Aleksandr Spectre (Dr Spectre, fka Aleksandr Kogan), working as a director of a small firm he co-founded called Global Science Research Ltd (GSR), then passed on to Cambridge Analytica (CA) and allegedly used to target voters with customised ads and messaging during the 2016 US Presidential primaries and election. The story actually dates back to at least 11-Dec-2015 when the Guardian wrote about how CA (funded by hedge fund billionaire Robert Mercer) had been working for Ted Cruz. That was before Cruz dropped out of the race and Mercer switched his support to Trump.

A UK Parliamentary committee has called for Mark Zuckerberg, Facebook's CEO, to tesify, and at home, US congressmen are making similar requests. Facebook has made a show of suspending CA and its part-owner, SCL Group Ltd (SCL, fka Strategic Communication Laboratories Ltd) from advertising on the platform. Mr Zuckerberg has embarked on a classic "this is not who we are" charm offensive to limit the reputational damage from what Facebook says was usage beyond the terms of its user agreement. On the other hand, via an email reportedly obtained by Bloomberg, Dr Spectre (no, he's not a Bond villain) says that his inital non-commercial app became a commercial app allowing commercial usage when GSR was incorporated and Facebook was told of this and didn't object. On 30-Apr-2015, after GSR had already collected its data, Facebook changed its system to prevent data on friends of app users being passed to apps.

All of this misses the point. Whatever information GSR and CA gleaned about 50 million users, it is only a tiny fraction of the information held on them, and on 2 billion users (32% of the global population outside China), by Facebook itself. And Facebook knows the value of this data. There's a reason why regular users don't have to pay anything to use Facebook, its subsidiary Instagram and its vast collection of data centres and army of software engineers - they are being monetised by Facebook itself, to the tune of over US$40bn of advertising per year, notably including political campaign advertising. If users were not already aware of that, they are now.

Who needs CA to target voters when Facebook will do it for you?

Facebook has a dedicated commercial site, politics.fb.com (in the internet archive since 28-Jan-2017), aimed at those who run campaigns, titled "Connect with constituents and voters on Facebook". In the Ad Campaigns section, it offers to "Find your voters on Facebook" and in a page of that, it offers "Political targeting", boasting that "Facebook offers a variety of targeting options to help you effectively reach voters". It has divided Facebook users into 5 categories ranging from "very liberal" to "very conservative", presumably based on statistical analysis of what they read on the site, who their friends are, where they work or even what they write. Facebook also offers three subgroups of users (liberal, conservative and moderate) who "are actively engaged with public political content" (presumably based on what they read and click on the site) and "have a high propensity to reshare content". Facebook tells advertisers that these users-who-share-a-lot are "effective for amplifying your message".

So ironically, all that Facebook is doing by restricting app-developers' access to its users' information is increasing its own value proposition to political advertisers, allowing campaigners to reach voters in a more targeted way than newspapers and broadcasters could ever provide in the past. Gone are the days when newspaper barons and their editorials had the highest influence over public opinion. Now it's all about data, focussed messaging and individual targetting to swing the marginal votes. And who needs to employ CA when you can pay Facebook directly to reach your electorate? It comes as little surprise then to find one of the co-founders and former directors of GSR, Joseph Andrew Chancellor, now working in-house at Facebook as a quantitative psychologist, one of many that Facebook employs to work on studying and exploiting its data cache on users' activity and behaviour.

Some of the same politicians who now want to have a media circus grilling Mr Zuckerberg will undoubtedly be spending campaign dollars or pounds on Facebook's political targeting service during their next election. It's rank hypocrisy.

Facebook is not alone in the scope of data it has on individuals. Other internet giants including Google possess similar data. Although Google doesn't have a meaningful presence in social media (Google Plus is an also-ran), they own the biggest email platform (Gmail), one of the two top smartphone platforms (Android), the dominant search engine, the biggest ad network and vast troves of data on anyone who uses them. The reason that Google can, for example, tell you how congested a road is this evening is not because they have roadside sensors but because at any given time large numbers of smartphone users running Android or having installed Google Maps on their iPhone will be making their way along the road at measurable speeds, transmitting their locations. Similarly, the crowdedness of bars, restaurants and tourist attractions is predictable based on data collected from users.

Big Brother and China

Whether users are OK with this is a personal judgment they make, or at least should be making, when using the services. In open and democratic societies, perhaps users are less worried about what large corporations, who can be secretly compelled to hand over data to the state, know about them. Users are protected by the rule of law, after all. If they are going to see advertising in exchange for content, storage and functionality, then they would rather see relevant than irrelevant advertising alongside their web pages, emails, photos, videos and other files. Most citizens are not criminals and not concerned about what the state knows - they just want to share their holiday photos and chat with each other and in groups via a convenient platform, knowing that Facebook can mine and exploit their data.

But in authoritarian states such as China which control what their citizens can see and which lack a reliable rule of law, such networks pose a bigger threat. Tencent, for example, with its billion active accounts, knows the social graph of China, who your friends and associates are, where you go, what you spend (if you use their payment app) and what you say to each other and in groups on the censored chat platform. Similarly Sina Weibo. The state security apparatus has access to all of this on demand, as well of course as access to data from the mobile phone operators. So even if you stay off the Tencent grid, if you use the phone network then the state will know a lot about anyone you call who is a user of these platforms, as well as being able to profile you based on your repeated common location with other users. All of this data is likely to be accessible to the state in China's forthcoming Orwellian Social Credit System, a combination of credit rating with mass surveillance. Knowledge is power. No wonder then that China won't allow Facebook into the game.

So let's not get hung up about what GSR, Cambridge Analytica or any other app developer knows about you. Facebook, Google and the other internet giants know far more, and that's what makes them so valuable, both to advertisers and to the Governments of states in which they operate.

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