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Facebook breaks up with the data brokers

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Last week, the central story about Facebook and the data privacy scandal was the company's silence. T
 
March 29 · Issue #108 · View online
The Interface
Last week, the central story about Facebook and the data privacy scandal was the company’s silence. This week, the company found its voice. Over the past four days, the company has:

After we put The Interface to bed last night, the company introduced perhaps its most serious response to the data leak yet: disabling an advertiser tool called Partner Categories, which allowed advertisers to use offline data gathered by brokers like Experian and Acxiom to augment Facebook’s targeting capabilities. At Recode, Kurt Wagner had a good overview of what changed:

Facebook previously let advertisers target people using data from a number of sources:
  • Data from Facebook, which the company collects from user activity and profiles. 
  • Data from the advertiser itself, like customer emails they’ve collected on their own.
  • Data from third-party services like Experian, which can collect offline data such as purchasing activity, that Facebook uses to help supplement its own data set. When marketers use this data to target ads on Facebook, the social giant gives some of the ad money from that sale to the data provider.
This third data set is primarily helpful to advertisers that might not have their own customer data, like small businesses or consumer packaged goods companies that sell their products through brick-and-mortar retailers.
As Julia Angwin noted in a thread on ProPublica’s work on this subject, political campaigns loved Partner Categories for its targeting precision.
Shares of Acxiom fell by 19 percent Thursday after Facebook ended its partnership with the data broker as result of the social media’s data privacy scandal.
As a result, Acxiom warned 2019 revenue could be hit by as much as $25 million.
As a consumer, it’s hard to feel much sympathy for the data brokers. Natasha Singer covered Acxiom’s unsavory methods in a 2012 story for the New York Times:
For Acxiom, based in Little Rock, the setup is lucrative. It posted profit of $77.26 million in its latest fiscal year, on sales of $1.13 billion.
But such profits carry a cost for consumers. Federal authorities say current laws may not be equipped to handle the rapid expansion of an industry whose players often collect and sell sensitive financial and health information yet are nearly invisible to the public. In essence, it’s as if the ore of our data-driven lives were being mined, refined and sold to the highest bidder, usually without our knowledge — by companies that most people rarely even know exist.
Facebook got a round of favorable coverage for the move. But critics have warned against giving the company too much credit. Wolfie Christi, which is honestly an incredible name for a big data researcher, went way deep in the weeds with a thread pointing out that businesses will still be able to achieve similar precision with their targeting even after the end of Partner Categories. The reason is Facebook’s Custom Audiences tool, which lets businesses upload their own hashed customer lists and then target that audience on Facebook.
Christi points out that businesses can still buy our data from brokers, and then sort and classify it themselves before uploading it to Facebook via custom audiences. “This is a quite smart move,” he tweeted. “They can tell the public things like ‘we cut off data brokers’, but in fact they are just trying to shift the responsibility for linking third-party data to FB user profile data more to the third-parties.” 
He continued: “Like 'whatever customer and real-time behavioral data other businesses upload via Custom Audiences, we’re just a neutral platform, we’re not responsible for which (personal) data they aggregate, collate and upload to Facebook.’”
If Christi’s line of thinking is correct, it stands to reason that sorting and classifying data for Custom Audiences might be a new white-glove service for companies like Acxiom to offer. In the meantime, advertisers are saying that the move actually serves to make Facebook more powerful. Here’s Michelle Castillo reporting for CNBC:
“This is an optics-based move that harms advertisers and doesn’t actually do much of anything to protect user privacy,” said David Eisenman, CEO of marketing agency Madwell.
The changes would force advertisers to rely on Facebook’s own data for targeting, “potentially boosting their own profits as a response to their own mistake,” Eisenman said.
“By denying advertisers the ability to utilize outside data partners, they further cement themselves as a walled-garden ecosystem—asking advertisers to trust and use their data exclusively. It’s bullshit.”
The CEO of Acxiom echoed that sentiment, telling Business Insider: “We are getting thrown under the bus.”
Facebook got a public-relations benefit from banning the data brokers. The benefit to Facebook users, though, still feels rather muddy.

Democracy
Growth At Any Cost: Top Facebook Executive Defended Data Collection In 2016 Memo — And Warned That Facebook Could Get People Killed
This is Facebook’s self-defense plan for the 2018 midterm elections
Revealed: Cambridge Analytica data on thousands of Facebook users still not deleted
Politicians rip Facebook, but they’re not deleting their accounts
Mexico’s First Facebook Election Is About To Begin And Nobody Is Truly Ready
Elsewhere
Apple CEO Tim Cook pounds the privacy drum in wake of Facebook scandal
Facebook Bonuses for Women Lower in U.K.; Amazon Pays Less Too
Snap Cuts About 100 Employees in Latest Round of Downsizing
Launches
Twitter’s Timestamps lets you share live videos from any specific moment
Instagram brings GIFs back to Stories with stricter moderation
Teachers and Parents Share Stories From Inside the 'Fortnite' Phenomenon
Takes
Why (almost) everything reported about the Cambridge Analytica Facebook ‘hacking’ controversy is wrong
Media vs. Facebook: This time it's personal
And finally ...
The Facebook/Cambridge Analytica Scandal, According To My Mom
Talk to me
Questions? Comments? Leaked memos? casey@theverge.com
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