Facebook Losing Face?

On a Tuesday late in May, one naturally wonders where the term “lose face” first arose. Perhaps not surprisingly, its origin can be traced to China. In 1876, British Diplomat Sir Robert Hart published an  essay which included this observation: “The country [China] begins to feel that Government consented to arrangements by which China has lost face; the officials have long been conscious that they are becoming ridiculous in the eyes of the people.” While the social intricacies of “face” are more complex in China, we all get the general concept, and can see how it may apply to a certain social media giant today.

Facebook’s extensive issues with privacy are well documented. Among its biggest challenges is reining in how third party developers it encouraged ultimately employed the information it shared about Facebook users. Now, its problems are accelerating. Last fall, Facebook announced a breach affecting up to 50 million users. The dust had yet to settle on that breach before cybersecurity research firm Upguard reported that more than 540 million Facebook users were publicly exposed on Amazon’s cloud computing service. Then, two weeks ago, a cybersecurity breach in Facebook’s messaging app, WhatsApp, left users vulnerable to malicious spyware installed on their smartphones. Hackers installing surveillance software on users devices is not a good look for WhatsApp, whose business model is premised on providing safe, secure, encrypted messaging.

Facebook has warned investors that it could face a Federal Trade Commission fine of up to five billion dollars related to its data privacy issues. While the company certainly can withstand that level of fine, it seems apparent that Facebook is squarely in regulatory and legal crosshairs. It is not a stretch to imagine that Facebook’s problems could lead to more substantial privacy laws, and that in the end Facebook may lose more than face if its problems continue.

By Tom Davis, SDI Cyber Risk Practice

May 30, 2019