Skip to main content

Canada Facebook shares tumble after Canadian whistleblower reveals abuse of data of tens of millions of users

Politicians in the United States and Britain are threatening to haul Facebook executives, including founder Mark Zuckerberg, before legislative committees in the coming months, amid revelations about the private data of tens of millions of users being misused – beginning years ago – to fuel deeply polarizing political campaigns.

The political outcry erupted this weekend after a 28-year-old Canadian political consultant emerged as a whistle-blower. In media reports, Chris Wylie described working with former Donald Trump aide Steve Bannon to mine data, after first finessing a massive dataset from Facebook, drawing upon the personal data of 50 million users.

Story continues below advertisement

Facebook shares were being hammered on the news. The stock fell as much as 6.8 per cent Monday in New York, wiping out all of the year’s gains so far. It was the biggest intraday drop since Jan. 12.

Facebook now says the political consultants in question should have never had this data. But though the company first learned of these problems in 2015, it didn’t apologize or disclose matters publicly. Instead, three years ago, it quietly asked the parties to destroy the dataset, and took them at their word that it had been done.

The long road to fixing Facebook

Facebook said on the weekend that it was conducting a “comprehensive internal and external review” to determine whether any third parties still had this data. “We will take whatever steps are required to ensure that the data is destroyed once and for all.” The statement also said that the company should not have taken the word of the parties concerned. “We trusted those statements to be true.”

After recent revelations about social-media meddling by Russian government agents in the U.S. presidential election, the California social-media giant had already been facing questions about whether it can shield its two billion active users from political manipulations and privacy invasions.

The latest revelations add fuel to that fire. Democratic Senator Amy Klobuchar of the judiciary committee publicly demanded that Mr. Zuckerberg appear before her group to explain “what Facebook knew about misusing data from 50 million Americans in order to target political advertising and manipulate voters.”

In Britain, Conservative lawmaker Damian Collins made similar demands – even though Facebook executives recently testified before his committee exploring so-called “fake news.”

“It is not acceptable that they have previously sent witnesses who seek to avoid answering difficult questions,” he said.

Story continues below advertisement

In recent days, Facebook had been pressed by media outlets – including The New York Times and the London Observer – asking about the magnitude of the data seepage and when it knew about it. But Facebook only revealed its account of what happened Friday night, through a public statement explaining it was “lied to” by one of its clients.

The spur for all this was Mr. Wylie, who this weekend came forward as a whistle-blower, describing himself as “the gay Canadian vegan who somehow ended up creating Mr. Bannon’s psychological warfare” tool. He spoke of coming up with algorithms that targeted political messages to the hearts, minds and even “inner demons” of American audiences.

But before that happened, he and his colleagues at Cambridge Analytica first had to finesse an enormous Facebook dataset through questionable means.

As a teenager, Mr. Wylie had worked for the Liberal Party of Canada. He also joined the 2008 U.S. campaign to elect Barack Obama. In his early 20s, he moved to Britain to study property law at the London School of Economics.

Starting in 2013, he was a paid political consultant with an entity known as the SCL Group, a British company seeking to spin out a U.S.-focused unit, that would become known as Cambridge Analytica.

At the time, SCL’s chief executive was courting the business of Mr. Bannon, in hopes of making headway into the realm of American politics. The Breitbart founder had not yet joined Mr. Trump’s team, but was serving as a political adviser to the American hedge-fund billionaire Robert Mercer, and his daughter, Rebekah, who gave Cambridge Analytica a US$15-million startup investment, according to Mr. Wylie.

Story continues below advertisement

On the technical side, the Canadian data-dredger was forging a partnership with a Cambridge University professor.

There, an academic named Aleksandr Kogan developed a Facebook app where users were paid a small fee to allow it to develop a psychological profile of them. In the fine print of the app’s licensing agreement, users agreed not only to handing over some of their own personal information, but also a degree of personal information from their Facebook “friends” whose privacy settings were low.

Such collateral research techniques were allowed for academia at that time, a Facebook official said. However, the official added that under the terms of the app agreement, the data was not supposed to be allowed to be passed along to third parties or political campaigns. But in this way, a consenting pool of 270,000 app users, and data drawn from millions of their unwitting friends, was parlayed into an enormous trove of information that could be used for political targeting, according to Mr. Wylie. Teams of political consultants used it to help their clients – including Mr. Bannon − zero in on American voters with known views.

Prior to Mr. Wylie’s admissions, a Cambridge Analytica executive told a British parliamentary committee that his company didn’t have or rely on Facebook data to get the company started. The firm released statements this weekend saying that one of its third-party contractors – and not itself – initially obtained the disputed data and that Cambridge destroyed it when it learned there were problems.

In response to Mr. Wylie’s whistle-blowing, Facebook issued a statement saying it felt “lied to” by Mr. Kogan.

“We are suspending Strategic Communication Laboratories (SCL), including their political data-analytics firm, Cambridge Analytica, from Facebook,” the company said. It added that “protecting people’s information is at the heart of everything we do.”

Story continues below advertisement

These banned people and companies will no longer be allowed to run apps or advertising or enter into contractual agreements with Facebook.

Facebook alleges that Mr. Kogan, the Cambridge professor who developed the app, misled the company and violated Facebook’s terms by handing over the data. “By passing information on to a third party, including SCL/Cambridge Analytica and Christopher Wylie … he violated our platform policies,” it said.

Mr. Kogan did not return an e-mail and a telephone message at his Cambridge office seeking comment.

With reports from Paul Waldie, Jeff Jones

Report an error Editorial code of conduct
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter