Here’s How Congress Should Respond to Facebook/Cambridge AnalyticaMarch 23, 2018
Facebook and Cambridge Analytica. By now we know the basic facts: Aleksandr Kogan, purporting to be a researcher, developed an authorized Facebook application. As was Facebook’s practice at the time, when users connected the app to their Facebook accounts, the app scooped up not only the users’ personal information, but also their friends’ personal information. In this manner, Dr. Kogan was able to amass information about 50 million Facebook users – even though only 270,000 individuals used the app. Dr. Kogan then, exceeding his authorized use of the data, funneled that information to Cambridge Analytica, a firm that purported to engage in “psychographics” to influence voters on behalf of the Trump campaign.
We also know that Facebook/Cambridge Analytica is hardly unique. Rather, unauthorized access to personal data seems to be a running theme this year – whether it’s in the form of Facebook/Cambridge Analytica where authorized access to data was misused and shared in ways that exceeded authorization, or whether it’s in the form of an old-fashioned data breach ala Equifax or Orbitz. (Did you notice that Orbitz announced this week that it had a data breach, and hackers may have acquired 880,000 people’s payment information?)
In the twenty-first century, it is impossible to meaningfully participate in society without sharing our personal information with third parties. Those third parties should have commensurate obligations to protect that personal information. Unfortunately, it has become increasingly clear that too many third parties are failing to live up to this responsibility. It is therefore incumbent on Congress to step in to protect consumers. Here’s how they should start:
But, having that information alone is insufficient. Consumers must also have meaningful opportunities to consent to data collection, retention, and sharing. And, that consent should be as granular as possible. For example, you may use my data for research purposes, but not for targeted advertising – or vice-versa. Or you may only retain my data for two years and no longer. As with notice, the consent I am describing must be real (e.g., not it-was-buried-on-page-thirty-nine-of-a-forty-page-privacy-policy-and-consent-was-implied consent). The General Data Protection Regulation, which goes into effect in Europe in May, will require some kinds of granular consent on the continent and in the UK, so companies already have to figure out how to offer their users opportunities for meaningful consent. There is no reason for them not to do the same in the United States.
2. Security Standards. When we trust a third party with something we own – particularly something personal – we expect that third party to take care of our possession. It should be no different with personal information. Third parties that are stewards of our personal information should be expected to adhere to the latest, state-of-the art security standards. This is particularly true when an individual cannot avoid sharing the information without foregoing critical services or declining to participate in modern society.
The other major barrier to meaningful recourse is the difficulty calculating the damages associated with unauthorized access to personal information. While one may be able to quantify her damages when her credit card information is breached or her identity is stolen, it is much harder to do so in a situation like Facebook/Cambridge Analytica. How do you put a dollar amount on having your privacy preferences ignored? Having your personal information revealed to third parties without your knowledge or consent? Having that information used for “psychographics” to influence your behavior in the voting booth? Fortunately, there is a concept called liquidated damages, which was designed to address these sorts of circumstances. Liquidated damages are used when the damage is real, but hard to quantify. In fact, liquidated damages are already used to address other privacy harms. For example, the Cable Privacy Act provides for liquidated damages when cable companies impermissibly share or retain personally identifiable information.
Yes, it’s true that the Federal Trade Commission (FTC) can step in when companies engage in unfair and deceptive practices, but the FTC is likely to only intervene in the most egregious cases. Moreover, the FTC can only extract damages from companies once they have screwed up once, entered into a consent decree with the Agency, and then screwed up again, violating the consent decree. That’s a lot of consumers who have to have their personal information abused before the company feels any pain. Moreover, when the FTC is involved, any damages go to the government, not to making individuals whole.
By contrast, allowing private, class action lawsuits for liquidated damages when companies fail to safeguard private information will create the necessary incentives for companies to take appropriate precautions to protect the information they have been entrusted with. Companies, after all, understand the technology and the risks, and are in the best position to develop safeguards to protect consumers.
Congress is going home for a two-week recess. Now is the perfect time tell your Senators and Representatives that when they return to Washington you expect them to address unauthorized access to personal data by requiring 1) meaningful notice and consent for data retention and sharing, 2) that companies adhere to appropriate security standards, and 3) that consumers have the opportunity for meaningful recourse when their data is abused.