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URL:  https://boards.fool.com/i-should-get-up-to-speed-on-what-really-happened-33019201.aspx

Subject:  Re: FB Date:  3/21/2018  2:07 PM
Author:  DTBoojum Number:  26101 of 26242

I should get up to speed on what really happened with FB/Cambridge but maybe the IT people here can help. It seems that FB developed a strategy, a few years ago, of monetizing data by actually getting 3rd parties like Cambridge to pay cash for using it. I presume this is data that is denominalized (maybe I assume wrong), and that there is no harm done to the individual FB user whose data is used. For instance, their telephone number of email address is not provided, and they can not be contacted by people like Cambridge.

As far as I can tell, the outrage is based on the fact that this data is actually quite useful for someone who wants to know more about FB users' (i.e. almost everyone's) preferences, and whether for instance people that like kittens would be happy to have stronger gun laws, etc. Of course, this is/was uncontroversial when it is/was used to elect a nice guy like Obama, but becomes controversial when the same use helps elect someone we don't like.

So if my initial take is correct, users are unlikely to be bothered because they have not been harmed in any way, but society as a whole may not like what happened and FB's reputation may take a bit of a hit that way (probably minor), and the more important question is whether governments take action and restrict this kind of data sharing (which would mean a minor hit to earnings and earnings potential), or fines (could be minor or could be major), or restrictions on future business combinations (buying future Instagrams, for instance). If this is all it is, I would say that the correction we have seen so far probably fully compensates a new investor for the clouds on the horizon. If there's something more nefarious that has happened, a prospective investor (such as myself) might be better to wait to see how the chips fall.

Does anyone have any more detailed information on the nature of the data use that all this fuss is about?

Thanks, DTB
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