3/19/2022
Student name ID number Contribution
Reem Abdullah Alkhalid 2200005864 14.3%
Amal Ahmed Alshahrani 2200005827 14.3%
Renad Mohammed Alghamdi 2200004310 14.3%
Noura Ahmed Alaliwiy 2200005859 14.3%
Haneen Esam Alarabi 2200001964 14.3%
Maria Fouad Almary 2200003201 14.3%
Kawthar Habib Alhammad 2200000459 14.3%
Facebook 2018 Scandal
Group 1
SECTION 221

1 | P a g e
table of content Page
number
introduction
ethical framework
stakeholder theory
practical consideration
conclusion
reference list

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Introduction
Facebook, one of the most widely used social networking sites that connects people
from all over the world, has been sued for not fulfilling its legal obligations to protect
users’ private information, as Facebook gave the political consulting firm Cambridge
Analytica access to the data of around 87 million people, leading to the collection of private
information from over 50 million people without their consent. Cambridge Analytica is a
political analysis firm that claims to be able to help its clients win elections by building
psychological profiles of voters.
Cambridge Analytica obtained data from a researcher, Aleksandr Kogan, a data
scientist at the University of Cambridge, who was hired to develop an app called "This Is
Your Digital Life" on Facebook that required the input of a user's information through a
given survey. Not only was the survey respondent's information collected, but Facebook
allowed the app to collect personal information from the respondents' Facebook friends.
Aleksandr Kogan then sold the data obtained from the developed app to Cambridge
Analytica. The collection of personal information by Cambridge Analytica was on going
privately from 2013 to 2016, but the situation surrounding the hidden data collection
reached a critical point when it was disclosed to the public in 2018 by Christopher Wylie,
who was a former Cambridge Analytica employee, in an interview with The Guardian and
The New York Times where he openly spoke about the improper collection and use of
personal information without the consent of the user.

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Ethical framework
The best ethical framework that's suitable for our topic is a social contract theory
(Contractarianism) which is the moral and political obligations of individuals are based on
a contract or agreement between them to build the society in which they live. We choose
this type of ethical framework because Facebook doesn’t respect the privacy of its users as
it is a social norm in every community. This entailed some challenges that Facebook faced.
First, Since the breach was revealed, the company's resilient stock (FB) has dropped for the
second day in a row, and that helps make companies more transparent with users about
what they do with their data. Second, it becomes hard for the customer to trust them after
what happened, and the most important benefit is that the users are being more aware
because it is sparking people's curiosity about what companies do with their data and thus
become warier. Third, In the Cambridge Analytical data leak, Facebook was sued for
failing to protect users' personal information and that has a positive effect because
Facebook will increase the user's privacy and disclose what you intend to do, and provide
some options that reassure the user about his data.
Stakeholdertheory
Every company should prioritize addressing the interest and expectations of their
stakeholders. Unfortunately, Facebook disappointed its stakeholders with the incident that
happened in 2018. First and foremost users (customers) of Facebook expected by signing
up in their platform that their privacy is protected and no one will be able to get access to
their information and that Facebook will offer a high level of security. However, Facebook
did not stand up for their promise of keeping their data safe and their privacy was
penetrated which was a result of Facebook not providing enough safety walls that prevent
such hacking from happening. After the incident users of Facebook expected an immediate
apology and justify its position to the public as well as providing an explanation of the
reason why this hacking happened and prevent it from occurring again. It took Mark
Zuckerberg 3 days until he showed on a press meeting to address his position which is
unacceptable as the users were expecting an instant response, this caused a huge frustration
to the customers and resulted in a significant decrease in Facebook users due to the
insecurity they felt by using a platform that could cause their information to be accessed
and used by others.
Investors' expectations from Facebook:
 Sustainability
 Mutual trust
 High returns
 Competitive advantage

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Investors are smart and know exactly where and what companies they will invest in.
Therefore, there are some important characteristics that they search for in their investment
process such as trustful and strong founders who have gained enough expert and knowledge
throughout the years, it is highly valuable that they invest their funds in such a reliable
company which can assure the investors that they made the right decision in investing to
their company. Investors expected that they made a good choice when they chose
Facebook, as Facebook is known for its good reputation and continuous success
However, Facebook has disappointed the investors when the scandal happened which has
proven that Facebook was the total opposite of their expectations.
After the big scandal for Facebook, investors expected that Facebook would apologize to
all its users and customers in order to obtain their trust and to rebuild their good reputation
as well. Investors also anticipated Facebook to restructure its management to make it more
dependable in order to avoid any future issues that could threaten the investor's core
purpose of increasing profit.
Facebook is a well-known company, and it is terrible that such a crisis occurs in the
company's history, therefore these are some of the suggestions that should be considered in
order to assist Facebook.
The following are some suggestions that may be useful:
 Prioritizing the privacy of customers
 Not getting into political issues that would be harmful to the company and its
stakeholders
 Employees must be closely monitored so that they do not assist in the leakage of
information, and strong penalties must be imposed.
 Once Facebook solved the problem, it should make an effort to please all
stakeholders including customers, employees, and investors.

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Practicalconsideration
It is known that Facebook is one of the most famous platforms out there, it has
developed its own strong reputation throughout the years. Due to its universal fame, it is
expected to have a powerful and unbreakable security system that protect users’ personal
information and privacy. In order to avoid such incidents from happening and protecting
the user’s data from being penetrated Facebook should do the following:
 Examining all apps that have had access to big quantities of data on its platform, as
well as apps that have engaged in questionable behavior.
 Notifying users whose personal data has been violated by applications.
 If a user hasn't used an application in three months, the application's accessibility to
their data gets disabled.
 Facebook login data should be restricted to users only.
 Reward people who point out bugs in the security wall system by giving them
financial rewards and certificates.
These would only be the first steps. In the long run, Facebook's privacy approach will
need to be drastically altered. Enterprise software service providers utilize a model that the
organization could learn from. It assumes that a customer's data is theirs alone, and that it
must be protected from third parties and other consumers.
Facebook should learn from this misconduct and address any such problem as fast as it
happens to calm the users and assure them that it wouldn’t happen again. During a crisis,
you must always strive to hold the position of communication leadership, establishing
control over the information being communicated

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Conclusion:
Facebook is well-known as one of the most popular social media sites, and it has built a solid
reputation through time. Because of its worldwide recognition, it is required to have a robust
and impenetrable security system that protects users' personal information and privacy. This
entailed some challenges that Facebook faced.
Facebook is well-known as one of the most popular social media networks, having built a
solid reputation through time. It is believed to feature a sophisticated and unbreakable
security system that protects users' personal information and privacy because of its
worldwide renown.
Facebook was sued for failing to protect users' personal information, which is a good thing
since Facebook will boost users' privacy, expose what you want to do, and give alternatives
that provide customers with peace of mind about their data.
This is just the beginning. Facebook's privacy policy will eventually have to be altered.
Enterprise software service providers have a model that businesses may learn from. The data
of a client is presumed to be personal and must be kept private from third parties and other
customers.
Facebook should take note of this misbehavior and solve any comparable concerns as soon
as possible to ensure users that this will not occur again. You must continually strive to be
the communication leader during a crisis, controlling the information.

7 | P a g e
Reference list
1. BBC News. 2022. Facebook sued over Cambridge Analytica data scandal. [online]
Available at: <https://www.bbc.com/news/technology-
54722362#:~:text=In%20October%202018%2C%20the%20UK's,apps%22%20had
%20accessed%20their%20data.> [Accessed 18 March 2022].
2. Judiciary.senate.gov. 2022. [online] Available at:
<https://www.judiciary.senate.gov/imo/media/doc/05-16-
18%20Wylie%20Testimony.pdf> [Accessed 18 March 2022].
3. cnbc. 2018. Facebook-Cambridge Analytica: A timeline of the data hijacking
scandal. [online] Available at: <https://www.cnbc.com/2018/04/10/facebook-
cambridge-analytica-a-timeline-of-the-data-hijacking-scandal.html> [Accessed 18
March 2022].
4. 2022. [online] Available at: <https://www.cnbc.com/2018/03/21/the-six-ways-
facebook-plans-to-prevent-another-cambridge-analytica-incident.html>
[Accessed 19 March 2022].
5. Ahmed, S., 2022. What Mark Zuckerberg should do to fix Facebook’s privacy
problem. [online] Amp.ft.com. Available at:
<https://amp.ft.com/content/c50f2cb6-3989-11e8-b161-65936015ebc3>
[Accessed 19 March 2022].
6. Equitymatch.co. 2022. Key investor expectations from a startup.. [online]
Available at: <https://www.equitymatch.co/newsbrief/key-investor-
expectations-from-a-startup/> [Accessed 19 March 2022].