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Week In Review: Facebook’s Cambridge Analytica Woes; The AT&T/Time Warner Trial Starts

1. Facebook’s Cambridge Analytica Woes

Every time we think 2018 couldn’t get worse for Mark Zuckerberg and company, it does. And while it’s hard to feel bad for a bunch of billionaires, they do seem to be mostly guilty of a combination of naiveté and avarice rather than an actual desire to overthrow our system of democracy.

Why It Matters

We’ll leave it to political pundits to discuss why it matters on a macro level. But on the micro level of the media industry, it matters because the data genie is out of the bottle.

Most everyone reading this column is aware of the level to which advertisers can collect data, but that’s because you all work for TV networks, ad agencies, MVPDs, web publishers and related businesses. But we are pretty sure that almost all of you, at one point, have tried to explain to a friend or relative who does not work in the industry (“media muggles”) how data collection works, and had them look at you like you were trying to convince them of the existence of Area 51.

Experian in particular seems to freak people out, the notion that there’s a company that tracks their credit card purchases so that someone else can identify them and match those purchases back to their mobile devices and set top boxes.

So What Now?

It’s not that most people will want Experian and services like it shut down and the CEOs tarred, feathered and paraded through the streets. It’s just that there needs to be much more oversight, much stricter policing of what data collectors can and can’t do and what constitutes actual permission.

Something a lot like the EU’s new GDPR (General Data Protection Regulation) and then some.

We think that over time, stricter rules will be put in place, consumer permissions will become far more blatant about what they are and what consumers are actually consenting to. (“Active consent” is a term you’ll hear a lot, and tricking people into giving consent just so you can say “but they opted in!” is no longer going to cut it.) You’ll also have new blockchain-based systems coming into play that will make managing privacy both easier and far more consumer-friendly. (Side note: if we had a dollar for every self-styled “social media guru” who has reinvented themselves as a blockchain expert, we’d be very rich indeed.)

But until everything shakes out, there will be a whole lot of outrage and pushback, both at Facebook and at companies who collect data through means that, like Experian, seem very creepy at first glance. Not to mention a whole lot of suspicion towards new technologies like Apple’s facial recognition software that seemingly create new ways to keep tabs on people.

What You Need To Do About It

No matter who you are in the media ecosystem, now is the time to stop tricking people.

There’s no reason to sugar coat it: if your consent forms purposely don’t seem like consent forms, if you’re pretending to collect data to “improve the customer experience” when in reality you’re just selling it to marketers to better target their advertising, if you’re doing something in the US you can no longer do in the EU thanks to GDPR, then just stop doing it.

The money you spend to remediate this will be much less than the money you’ll spend trying to win customers back once you get found out.

And you will get found out.

So there’s that.

Added Bonus: Because we like you, we’re also going to pass on the best thing we’ve read about Facebook and data collection as of late, hat tip to our friend Ben Kunz: it’s the story of a guy who created a moderately successful Facebook app about eight years ago and how he inadvertently wound up with reams of user data, and why users thought that third party apps like his were just an official part of Facebook. Bonus points in that it’s very well written and an easy and often humorous read.

 

2. The AT&T/Time Warner Trial Starts

AT&T’s lawsuit against the Justice Department starts this week, as soon as the snow melts, and it’s been covered ad infinitum in the trade and mainstream media.

There’s one key point though, that we haven’t seen mentioned anywhere: AT&T owns last-mile broadband (and will own a major chunk of 5G as well) and that bugs the living fuck out of GAFA.

Why It Matters

One of AT&T’s key points—and it’s a very valid one—is that media companies like themselves need to merge, especially vertically—so that they can have the scale to compete against the Silicon Valley behemoths.

But AT&T and other MVPDs hold a secret weapon, their kryptonite, if you will, in that they have a virtual monopoly over broadband. So that, technically, AT&T could get together with Comcast and Verizon and decide to block Google and Facebook, and, in the absence of net neutrality protection, there’s not a thing the Duopoly could do about it.  (Yes, of course users would be unhappy but theoretically the threat exists and is real.)

That’s why the GAFA companies are no doubt secretly rooting for the DOJ to prevail here, because they desperately want to get their hands on that last mile broadband too, quite possibly by buying up one or more of the MVPDs and telcos. Which would really give them control over the entire supply chain.

At which point Congress will likely decide it’s time to break them up, so the lesson here might be to be careful what you wish for.

That said, a smaller unmerged AT&T is a lot easier for a GAFA company to purchase than a merged one.

What You Need To Do About It

While we hear that Facebook might be busy with some 2016 election related issues 😉 the other three GAFA companies will likely be monitoring this case. So keep your eye on them and if they actually let on to what they’re thinking and who they’re rooting for. (As if we didn’t know, but stil ….)