Facebook Sued by Investors Over Voter-Profile Harvesting

https://www.bloomberg.com/news/articles/2018-03-20/facebook-sued-by-investors-over-voter-profile-harvesting

by juststeve • 8 years ago

419 162 8 years ago

bloomberg.com

jayess• 8 years ago

...and here come the lawyer vultures (full disclosure, I'm a lawyer).

toomuchtodo2• 8 years ago

Lying to your investors is securities fraud.

Enthusiastic about what the discovery process uncovers.

Pilfer2• 8 years ago

What material fact did Facebook lie to their investors about?

an4rchy• 8 years ago

Can any lawyers summarize the actual lawsuit?

What do these investors want exactly, more money?

The stock price went up by any measure, from Feb 3, 2017 to Mar 19, 2018, so it can't be compensation for that. Unless they are willing to give those gains back?

Pilfer2• 8 years ago

I have read the lawsuit, and it accuses Facebook of making false and misleading statements in their data privacy policy. It takes issue with this section of Facebook's privacy policy:

While you are allowing us to use the information we receive about you, you always own all of your information. Your trust is important to us, which is why we don't share information we receive about you with others unless we have:

• received your permission;

• given you notice, such as by telling you about it in this policy; or

• removed your name and any other personally identifying information from it.

The lawsuit claims Facebook violated bullet points 1 and 2, citing the CA news. The lawsuit uses this point to argue Facebook lied to their investors, did not provide more information on this in their SEC filings, and that investors suffering financial loss when the stock price fell after CA news.

philipodonnell• 8 years ago

Is that policy dated? Its possible a different privacy policy was in effect when all this went down.

toomuchtodo2• 8 years ago

Facebook has lost almost $60 billion in value since the CA story broke. If you’re an investor, and this information wasn’t publicly available to you, you might feel aggrieved and want to seek compensation.

7347867109343• 8 years ago

Should investors be able to sue a company anytime its stock goes down?

dfxm122• 8 years ago

IANAL, but I think the key phrase from the article is this:

"The suit would represent people who bought shares of Facebook from Feb. 3, 2017, when Facebook filed its annual report and cited security breaches and improper access to user data, through March 19.

Investors may be able to sue Facebook successfully if they can show the company induced them to invest based in part on false, misleading or incomplete information regarding practices that might have averted the user privacy issues, Robbins said."

The fact is, Facebook knew about the voter-profile harvesting. The question is, were they legally supposed to disclose it publicly and did anyone invest in Facebook under the false pretenses created by Facebook choosing not to disclose it.

It's kinda narrow and it is very hard to prove why someone chooses to invest in a company. I doubt this get much traction. I also think it sets a scary precedent, unless the plaintiffs can prove Facebook covered this up with an intention to lure potential investors (like a memo from Zuck stating as such).

throwaway847425• 8 years ago

I find it remarkable that when Obama did something similar in 2012, it was hailed as a major strength of his campaign and nobody had any problems with FB.

cjsawyer• 8 years ago

Their work was upfront and they weren’t trying to buy info or hide behind an unrelated app. This feels scummy in comparison.

throwaway847425• 8 years ago

Their work was so “upfront” that FB internal monitoring alerts have fired from the spike in load, and FB assured them that this is OK and they are “on the same side”: https://www.google.com/amp/thehill.com/opinion/technology/37...

Bad optics, no matter how you slice it.

rdtsc2• 8 years ago

As sibling comment pointed they were about just as scummy on average but everyone decided to look away and pretend to not notice, even FB after they caught them siphoning all social graph data.

Well actually that's not quite accurate, some didn't look away, they were singing praises. His campaign won a major marketing award in 2008, beating Coke, Nike and Apple:

http://adage.com/article/moy-2008/obama-wins-ad-age-s-market...

---

I honestly look at Obama's campaign and I look at it as something that we can all learn from as marketers [...] to see what he's done, to be able to create a social network ...

Jon Fine, marketing and media columnist for BusinessWeek, pointed to Mr. Obama's facility with engaging voters in social-media channels. "It's the fuckin' Web 2.0 thing," he said.

---

(Sorry for repeated link, I know it has been posted many times but I think it perfectly illustrates the point well).

krapp2• 8 years ago

I wonder... were one to check every story about this posted to HN, what percentage would contain a comment claiming that Obama did the same or worse?

curious_fella1• 8 years ago

But he did though...and there was no scandal then. Why now?

rhizome4• 8 years ago

Judging from Twitter the odds are 100%.

throwawaysecops• 8 years ago

Trolls are everywhere, nowadays. Time for identity to reign for a while.

adventured• 8 years ago

The data & privacy abuse by the Obama campaign was in fact dramatically worse. As an opinion piece at TheHill.com noted today:

The former Obama director of integration and media analytics stated that, during the 2012 campaign, Facebook allowed the Obama team to “suck out the whole social graph”; Facebook “was surprised we were able to suck out the whole social graph, but they didn’t stop us once they realized that was what we were doing.” She added, “They came to [the] office in the days following election recruiting & were very candid that they allowed us to do things they wouldn’t have allowed someone else to do because they were on our side.”

It's universally understood why the media wasn't interested in turning that story into a scandal. When it's your team, you look the other way for the perceived greater good.

rhizome4• 8 years ago

The Trump case complicates "dramatically worse," since the issue is that the data was sold to third parties who ultimately affected the election with it.

bb882• 8 years ago

It's universally understood why the media wasn't interested in turning that story into a scandal.

I agree that it's bad (not just looks bad), but you can't blame the media for something they didn't know about. Fox News went on for years about Benghazi. So in 2018, you can't complain about media being too friendly to democrats.

Also, the piece links to a tweet[1] in 2018, not an article from 2012.

[1] https://twitter.com/cld276/status/975568208886484997

jriley• 8 years ago

IANAL but believe one key difference is if work is done by US citizens or green card holders.

stu432• 8 years ago

Ha, the United States who forces globalisation for everyone else but can't handle it themselves!

swang• 8 years ago

If you're talking about how much data siphoned through Facebook and how much help they got from Facebook. Yes I agree pretty much the same thing (although I guess CA hid it somehow(?) and Facebook just refused to block them even after discovering it)

The differences I see between CA and the Obama's own campaign.

CA was accused of, "Setting up proxy organisations to feed untraceable messages onto social media"

There's also the issue of whether they went around campaign finance laws.

"So, campaigns are normally subject to limits about how much money they can raise. Whereas outside groups can raise an unlimited amount. So the campaign will use their finite resources for things like persuasion and mobilisation and then they leave the ‘air war’ they call it, like the negative attack ads to other affiliated groups"

https://www.channel4.com/news/exposed-undercover-secrets-of-...

LukaAl• 8 years ago

I find it remarkable that people don't understand there's a non-subtle difference between signing up voluntarily on the Obama website using Facebook and consenting to the information collection vs. signing up for a quiz from an unrelated company and having that data used by the Trump campaign.

If you don't understand the difference, it is the same difference between having consensual sex with your girlfriend and raping your neighbor girlfriend because she consented to have sex with him...

Now, this metaphor is imperfect, but from what we could see the Obama campaign was within the boundary allowed by Facebook TOS and what disclosed to the user. Did they push this to the limit? Yes. To the point that FB didn't think it was feasible. But legit according to the rule. Maybe having consensual extreme BSDM sex with your girlfriend vs. raping your neighbor's GF? Quiz, which one is legal and which one is not?

dominotw• 8 years ago

horrible metaphors.

mistermann9• 8 years ago

The world would be a much better place if people weren't so utterly ignorant of their personal bias.

vanilla_nut4• 8 years ago

I believe the Obama campaign used Facebook friend connections to target individual voters [1]

("Online, the get-out-the-vote effort continued with a first-ever attempt at using Facebook on a mass scale to replicate the door-knocking efforts of field organizers. In the final weeks of the campaign, people who had downloaded an app were sent messages with pictures of their friends in swing states. They were told to click a button to automatically urge those targeted voters to take certain actions, such as registering to vote, voting early or getting to the polls.")

Note that I specifically picked an article from 2012 because the past 48 hours has seen quite a few articles discussing the Obama Facebook campaign -- articles which I'd argue are likely subject to a taint of bias, given the recent CA events (I'd guess that journalists are digging for a story, which tends to skew perspectives). Anyway, this kind of targeting is, in hindsight, not really OK with me -- but I think the line here is that the Obama campaign collected information and asked your friends (who supported the campaign) to pitch in by asking particular friends to vote. This year's election was much more subtle, since instead targeted voters were treated to a slew of biased ads and propaganda stories. At least, that's how I see it.

Also, while I don't disagree with your analogy, anything involving sexual assault is probably going to hurt rather than help your arguments with most crowds. I don't think it's something we should ignore, of course, but we should keep in mind that it's a strong metaphor -- akin to calling someone "literally Hitler" -- so you might want to reconsider that in the future. Not trying to be a jerk, just trying to be helpful, so feel free to ignore my unsolicited advice.

[1] https://www.cnn.com/2012/11/07/tech/web/obama-campaign-tech-...

rdtsc2• 8 years ago

signing up voluntarily on the Obama website using Facebook

So the whole social graph signed up to Obama's website? Because that's exactly what was happening.

https://www.theguardian.com/world/2012/feb/17/obama-digital-...

---

Every time an individual volunteers to help out – for instance by offering to host a fundraising party for the president – he or she will be asked to log onto the re-election website with their Facebook credentials. That in turn will engage Facebook Connect, the digital interface that shares a user's personal information with a third party.

Consciously or otherwise, the individual volunteer will be injecting all the information they store publicly on their Facebook page – home location, date of birth, interests and, crucially, network of friends – directly into the central Obama database.

---

it is the same difference between having consensual sex with your girlfriend and raping your neighbor girlfriend because she consented to have sex with him...

Really, rape, that's the best metaphor to reach for...

thousandautumns2• 8 years ago

You are right, that is non-subtle difference and should be noted. But I feel like the most egregious aspect of the process was being able to gather data on unsuspecting users by getting their friends to use the app. That's entirely legal, but definitely is the part that I think most people take the biggest offense to, and that is something that was done by both the Trump and Obama teams.

oldsklgdfth• 8 years ago

Your comment points out something very interesting about modern marketing. I think it is still ethically questionable even if you voluntarily hand over your data and not in a sketchy let-me-mine-your-friends-data-through-this-quiz way.

I feel like you used to be able to avoid getting swindled by ignoring the swindler, ex. close the door to the saleman, or ignore the gypsy pear salesmen at the market.

Today, marketing is engineered at such a level that it is difficult to awknowledge it's influence. That, and you are constantly bombarded by ads, either explicitly or implicitly.

I don't think I am saying anything novel. I guess I am curious what this mean about society and our political systems. People with power and wealth could still be toppled when you exposed them to the truth. How in the fuck does that even come close to happening today? How do you overcome marketing that is engineered to exploit the psychological vulnerabilities you are not even aware of? How do we patch our society and governing systems from being pwned?

This isn't meant as a rant. I am curious, because to the best i can tell we don't live in a society where voting matters and we have a say in our governance.

jjxw• 8 years ago

This happens any time a public company's stock goes down because of unexpected news. Investors sue for breach of fiduciary duty in an attempt to recover losses in the share price as a result of alleged negative, material information being withheld from the public by the company's management.

That being said - this should be particularly interesting given the topic. Securities fraud cases are usually boring, but this lawsuit may bring to light more details on exactly what FB didn't disclose.

downandout9• 8 years ago

"...defendants made false or misleading statements and failed to disclose that Facebook violated its own data privacy policies by allowing third parties access to personal data of millions of Facebook users without their consent..."

The "without their consent" part is BS, as is this lawsuit. When you use Facebook platform apps, you have to consent to the disclosure of your information to the developer, and have to agree to allow whatever special permissions the developer is asking for. As for friend data that apps may have access to, when you sign up for and use Facebook, you agree to the terms and conditions, which allow this behavior.

Investors had the opportunity to view both the developer platform policies and Facebook TOS long before they ever bought shares. If they didn't like the possible implications of them, they should not have invested. My guess is that this case will go nowhere.

oldcynic3• 8 years ago

Correct me where I'm wrong but did it not used to be the case that facebook apps could access almost as much info about your friends as they could about you?

So where is the consent? Fred gives consent to run a personality quiz and its associated data gathering - Fred's 180 friends didn't.

downandout9• 8 years ago

That consent is contained in the TOS that you and all of your friends agreed to when you signed up for Facebook. Further, the access to friend data has always been more limited than you imply here, and more recently, it’s become so limited that using apps for data collection about friends is almost a pointless endeavor.

makomk• 8 years ago

This is, of course, true but it's not clear why investors should have any grounds to sue over it. This wasn't actually a PR problem for Facebook until relatively recently - for instance, the 2012 Obama campaign harvested data about the Facebook friends of people who volunteered access to their accounts, those friends obviously didn't consent, and this mostly just lead to glowing articles about how clever this was and how commercial companies could copy it.

What it took for this to be a problem for Facebook was Trump running for and winning the presidency, the press needing someone to blame other than themselves, and them being willing to bury minor details like the campaign probably not actually using the data in question in any form. That doesn't seem like something which could reasonably be predicted in advance.

kaeawc• 8 years ago

I am a developer of an app that makes use of Facebook friend permissions and have seen the various API changes they have made since 2014.

Applications using Facebook Graph 2.+ (which is the only option since Spring 2015 or so) who access friend data may only access data of friends who have also given consent to your app. So if A and C log into a Facebook app, and A is friends with B and C, the app can only be aware that A and C exist. This is true of legacy and new Facebook applications. It used to be possible to get basically everything about B (name, age, gender, photo, etc), but that all got shut down when Graph API 1.0 was discontinued. If this is somehow not the case for some Facebook apps that got special permission or there is a hack to get at the data, that would be a huge breach of trust.

downandout9• 8 years ago

That’s actually the point of my post. I have been developing Facebook apps since the very beginning of the developer platform, but stopped because the new rules were so restrictive that they made apps useless. There is no point to developing social network apps that can’t involve the user’s social network.

Since all apps have these restrictions, I don’t believe that any apps at issue here had special permissions. However, it is possible that they scraped public data and were assisted in being pointed to which data to scrape by the direct profile data they obtained through the apps. Enough friends lists etc. are public to make this potentially beneficial.

No specs have been released about CA’s “psychographic profiling”. We don’t know the extent of the data that they had access to, what data went into it (perhaps it was based on name and friends list only, which are mostly public etc.). So until we know more, we can only assume that these apps had the same constraints that all others do.

IshKebab2• 8 years ago

They haven't got around that, it's just that this data "breach" happened before 2015 when the old API was removed.

bunderbunder2• 8 years ago

The modern approach to consent in these things arguably immoral, and indisputably awful.

Most adults simply don't have the ability to understand the dense legalese that these contracts are written in, so they don't. Asking people to take an hour or two to properly read and digest it just to sign up for a website is ridiculous, and expecting them to actually do so is like something out of a Terry Gilliam movie.

abetlen• 8 years ago

I get this argument for users but we're talking about investors, surely they should be taking an interest in the companies they put their money into.

JimmyAustin3• 8 years ago

The provision that allows this is ~460 words into the TOS, and is written in pretty easy to understand english. At some point you need to hold yourself accountable for agreeing to this stuff.

OrganicMSG• 8 years ago

The "without their consent" part is BS, as is this lawsuit. When you use Facebook platform apps, you have to consent to the disclosure of your information to the developer, and have to agree to allow whatever special permissions the developer is asking for. As for friend data that apps may have access to, when you sign up for and use Facebook, you agree to the terms and conditions, which allow this behavior.

As far as I am aware, across the whole of Europe, pretty much none of those TOS click-through things hold up as informed contractual consent. They aren't really worth the pixels they are written on in many jurisdictions.

underwater2• 8 years ago

For reference, here’s the permission dialog from 2010 (https://soundbid.files.wordpress.com/2012/05/fig_03.jpeg). Sharing data and friends lists is not hidden at all.

mankash666• 8 years ago

Disagree - your argument makes no legal point. This suit is by institutional investors who have access to the best lawyers in the country. They chose to sue fully aware of the TOC, they obviously know more

downandout9• 8 years ago

they obviously know more

Or they're just greedy and looking for a quick settlement, like all other class action securities attorneys do when the sue over large stock price drops. These types of suits are filed daily, many of them without merit.

For a fascinating look at Bill Lerach, the lawyer who perfected this tactic, check out [1]. He squeezed so much money out of public companies and caused so many problems with these often ridiculous lawsuits, that Congress passed a bill limiting them that became known as the "Get Lerach Act". He eventually went to federal prison for paying kickbacks to plaintiffs.

[1] https://www.youtube.com/watch?v=wYIC9GU9OeM

anonytrary• 8 years ago

agree to allow whatever special permissions the developer is asking for

You can't just write up an arbitrary contract and assume it will hold up in a court of law. For example, if I tried to rent out a unit by signing a lease that allowed the landlord to turn my water off if I posted a negative review about them, their lease would probably be found in violation of the corresponding state's landlord-tenant laws.

Precedents are established all the time. In the case of Facebook, this is something that common law would not have addressed prior to the early 2000s. Never before have we had such an efficient data-mining machine in the hands of anyone. New technologies warrant new laws.

Edit: One example of such a landlord, by the way, is Anne Kihagi who neglected many such tenants. I'm not sure if she did so through a faulty lease, however. It's late... https://www.modernluxury.com/san-francisco/story/home-invade...

rmc2• 8 years ago

When you use Facebook platform apps, you have to consent to the disclosure of your information to the developer, and have to agree to allow whatever special permissions the developer is asking for. As for friend data that apps may have access to, when you sign up for and use Facebook, you agree to the terms and conditions, which allow this behavior.

So it depends on what you mean by consent, and whether you want to specify "informed consent". Lots of EU data protection law talks about "informed consent". If you asked 1,000 facebook users what they had consented to, they probably would not think that they had consented to that. One can make a case that the long legalese with a checkbox at the end isn't (informed) consent.

dqv3• 8 years ago

If you asked 1,000 facebook users what they had consented to, they probably would not think that they had consented to that.

SomeFacebookApp is requesting permission to do the following:

Access my basic information: Includes my name, profile picture, gender, networks, user ID, list of friends, and any other information I've shared with everyone.

Access my contact information: Current Address and Mobile Phone Number

I can't imagine how much more explicit this could be. I don't think the argument that it's behind legalese would hold. And it seems pretty informative about what information is going to be taken.

oneeyedpigeon• 8 years ago

In fact, I can demonstrate that Facebook has the wherewithal to explicitly determine that I haven't read their TOS, yet chooses not to do so. I would argue that construes some kind of acceptance that the TOS are unenforceable. IANAL, and I'm not aware of that argument being attempted, but I'd quite like it to be.

beedogs• 8 years ago

I'll truly never understand the people who defend Facebook to the death on here.

cryoshon• 8 years ago

unfortunately some people are boot lickers by nature.

or perhaps they need to believe facebook is innocent to justify what they're working on.

urda• 8 years ago

I've already ran across at least one user who was obviously astroturfing trying to play down FB's involvement in this crap, it's actually kind of horrifying to see on here.

bdcravens• 8 years ago

It's part of the startup mythos: lone wolf (nerdy dev in a hoodie no less), builds a CRUD app, becomes stupidly rich via nothing but the hustle. Attacks on that weaken the foundation of belief.

discordance• 8 years ago

A bunch of people on here work for FB...

underwater2• 8 years ago

For some perspective: I’m ex-Facebook. I wouldn’t claim that Facebook are completely benign, but I think they’re getting a raw deal in this situation.

The argument that they shared too much information with third parties is a fair one. I don’t know if it was caused by naivety or apathy. But they never hid what they were doing from users. And, unlike some are claiming, they definitely didn’t sell that information.

It was Cambridge Analytica who chose to “weaponise” (their word) that data. The engineer who acted as a whistleblower is currently playing the victim but chose to participate in a morally bankrupt project.

dfxm122• 8 years ago

On the one side, you have Facebook. On the other, you have lawyers trying to bring a questionable suit and wealthy investors upset that their portfolio's value went down slightly short term.

This is not the thread to get sanctimonious about people defending Facebook.

wu-ikkyu3• 8 years ago

Does anyone know the percentage of Zuck's total FB stock that he has sold in the past year? It looks like a lot but have not been able to find a precise percentage change.

ppbutt• 8 years ago

So when is everybody going to band together to bury Facebook and all these other insidious tech companies?

_xczx2• 8 years ago

Dunno. I just deleted mine, was sort of annoying not being able to find mobile phone numbers or emails for people I'd like to stay in touch with. I think that it'd be good to have a script that scrapes facebook id's, names, mobile numbers etc from your friends list, or some automation to prepare for deleting your account.

Tempest1981• 8 years ago

This?

How can I download a copy of my Facebook data?

https://www.facebook.com/help/302796099745838

null000• 8 years ago

Remember, you can do pretty much whatever you want just as long as you don't screw over rich people.

Probably wouldn't be seeing this headline if it weren't the investors that were upset.

sAbakumoff• 8 years ago

There should be also the class action lawsuit filled by owners of harvested profiles. Hope to see that soon and celebrate the beginning of the end of Facebook.

DyslexicAtheist• 8 years ago

The media discusses voter-profile harvesting mostly in a past context of Brexit and US elections. These countries are politically stable. A far more dangerous picture paints itself in emerging and poor economies.

For example FB recently announced it would roll out job-posts[1] for low-income workers.

In poor parts of Europe like Croatia, Serbia, BiH & Balkans (where I chose to live and work as a foreigner), many people use Facebook to find work and network w/ colleagues. In these locations facebook is the Internet. Often you usually accept a friend request before you are able to discuss a job.

FB job market will lock in users from those regions even further. These economies don't stand a chance and are already bled dry thanks to facebook & Co not paying their taxes. These locations already suffering a huge braindrain of local talent.

Their local society / governments are becoming increasingly corrupt[2] because and honest work opportunities are so scarce some people (like nurses or occupational therapists helping the elderly and disabled) even work for free[3] (I know several people who have the choice of working for free or not be able to graduate).

So many people just leave to the North where they find themselves in slave-labor like conditions in Germany[4]. (sorry for switching focus to Germany for a second I'm trying to show some causality). It's not limited to healthcare. Literally any industry has setups where shady middle-man benefit from Germanys "Arbeitnehmerüberlassungsgesetz" (yes that's a word) which is Germany's outsourcing law (a law criticized for creating a dual class workforce) and they are making a killing thanks to the many loopholes present to exploit foreigners/minorities.

When facebook rolls out it's job postings for low-skilled and low-paid jobs it's targeting the most vulnerable minorities in politically volatile regions.

One takeaway from the facebook/CA election meddling is that because majority of people in Balkans are already depending on facebook, it's even easier to spread disinformation and rig elections. And it's giving powers to local crime gangs which usually influence 100% of the electorate[5]. Ask yourself what data harvesting means in these regions, who benefits and what effects this might have 3-5 years from now.

[1] https://techcrunch.com/2018/02/28/facebook-job-posts/

[2] https://euobserver.com/political/136664

[3] http://www.etf.europa.eu/pubmgmt.nsf/%28getAttachment%29/760...

[4] http://www.dw.com/en/foreign-nurses-exploited-by-unfair-priv...

[5] https://www.amazon.com/McMafia-Journey-Through-Criminal-Unde...

colony• 8 years ago

facebook and other giant sites, they have more information about us then our friends.

Facebook Sued by Investors Over Voter-Profile Harvesting

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