I doubt Facebook is going to last the decade, given that its problems continue to snowball. On paper, the U.S. government should own the company for violating its own consent decree ($1.2M per user violated and the users are 85M) with regard to protecting personal information. The corporate valuation set records for how far and fast it dropped (and triggered expensive litigation). The reputation of the firm and its CEO have dropped dramatically to historic lows.
I think the entire data-funded social market is at risk because it puts at cross purposes revenue and privacy. Revenue generally wins, but if caught, that win could be catastrophic for the company as it could result in fines, penalties and judgements that could consume the firm.
Unless Facebook finds a way to reverse this trend, it is likely done. The biggest part of the problem is that it still doesn’t seem to be taking the risk seriously enough. I think it is ironic that IBM seemed to see this exposure far more accurately. Back in October of last year, and before the Facebook difficulties, it moved to address the risk, not just for IBM but for IBM customers. The IBM Data Responsibility rules are almost identical to what Facebook should have implemented to prevent potentially terminal problems. In January of that year, IBM flagged how important trust from customers was and concerns about what would happen if that trust was breached in an AI context. What many likely missed is that this trust is assumed to be in place for existing, human driven, companies but this showcases just how far ahead of the related problems IBM is working.
This suggests that IBM might be the best source for Facebook or any other company concerned about the potentially terminal exposure of breaching customer trust and violating privacy.
The rules that IBM articulated for its business set a high bar and should likely be replicated by companies that wish to avoid the kinds of problems Facebook is experiencing and that Google will likely experience (among others).
Rules for Customer Privacy Protection
DATA OWNERSHIP AND PRIVACY: A world being reshaped by the phenomenon of data requires clarity around the principles and rules of the road to ensure that the rights of those who own it and use it are protected.
DATA FLOWS AND ACCESS: IBM is fully committed to protecting the privacy of data, which is fundamental in a data-driven society.
DATA SECURITY AND TRUST: As a global leader in enterprise security, IBM has a unique perspective on the rapidly growing threats of an increasingly open marketplace and public sphere. We are devoting our powerful engines of technology innovation to create the tools to protect our clients and global trade – from AI to blockchain. And we are drawing on our global array of trusted relationships to convene business, government, academia and all civil society to address our collective need, while striking the crucial balance among security, privacy and freedom.
DATA AND ARTIFICIAL INTELLIGENCE: From our long history of pioneering AI technology and the work we are doing to help our clients apply it around the world, we have learned that these capabilities – which are better understood as “augmentation” than “artificial” – represent a positive and transformative force for businesses, institutions, governments and individuals. We have also learned that they must be developed in thoughtful and responsible ways.
DATA SKILLS AND NEW-COLLAR JOBS: IBM is leading efforts to ensure workers worldwide are prepared for technological and business shifts that are changing the way work gets done, and that are driving productivity, economic growth and job creation. We are working with policymakers to modernize education systems to emphasize in-demand skills rather than specific degrees. Preparing more students and workers for careers in well-paying new-collar jobs will help ensure that more workers have an opportunity to benefit from technology-driven economic growth.
Now, each company’s business is very different and the language you’d use would likely be different as well. However, the elements of protecting where the data is stored and access to it, assuring security and promising not to breach trust, assuring that advancements work for the betterment of customers, and ensuring that skills are developed to address these new technologies and risk are to point. And not having rules like this that folks followed is how Facebook (and likely others) are getting into trouble.
Wrapping Up: Young Companies Can Learn from Older Ones
Facebook is a young company. Like most young companies, the odds of failure, even at its size and scale, are still exceedingly high, largely because of its business model. IBM, one of the oldest companies in the world, appears to have thought through the kinds of policies its own firm should implement to survive these changes. Facebook and others would do well to learn from IBM before they once again discover why so many promising firms don’t make it to their 20th anniversary, let alone their 100th.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+
