Business Ethics Group Project:

"Ethics in Technology and Data Privacy: A Case Study of the Facebook-Cambridge

Analytica Scandal"

Submitted to: Neha Rastogi Ma’am

Submitted By:

Vishal Jinagal – (0231PGM030)

Harsh Singh – (0231PGM162)

Pulkit Tiwari – (0231PGM063)

Udit Joshi – (0231PGM140)

Upendra Nagar – 0231PGM134)

Relevance of the Topic

In the digital age, the rapid growth of technology has transformed how businesses operate
and interact with customers. However, this transformation has raised critical ethical
concerns, especially around data privacy. Companies collect, store, and process vast
amounts of user data to improve services, enhance personalization, and drive profits. While
these practices benefit businesses and consumers, they also create significant ethical
challenges, including:

• Data misuse: Using personal data without consent.

• Lack of transparency: Failing to inform users about how their data is handled.
• Security breaches: Inadequate safeguards leading to data leaks.
• Surveillance concerns: Overstepping ethical boundaries in monitoring user activities.

Focus of the Project

This project examines Technology and Data Privacy Ethics by analyzing the infamous
Facebook-Cambridge Analytica scandal. This case serves as a prime example of how
ethical lapses in data privacy can undermine public trust, attract regulatory scrutiny, and
harm stakeholders.

Why Facebook-Cambridge Analytica?

• Background: Cambridge Analytica improperly accessed the personal data of millions

of Facebook users to create psychological profiles and influence voter behavior
during the 2016 U.S. presidential election.

• Ethical Implications:
o Lack of user consent in data sharing. o Manipulation of
information for political purposes.
o Inadequate oversight and accountability on Facebook’s part.
• Global Impact: The scandal brought data privacy issues to the forefront, leading to
stricter regulations like the EU’s General Data Protection Regulation (GDPR).

Objectives for the Case Study

1. Analyze the ethical dilemmas arising from Facebook’s data privacy practices.

2. Explore the impact of these practices on stakeholders, including users, regulators,

and society.

3. Propose recommendations to improve ethical standards in data privacy.

Research Objectives
a. Identify a specific ethical issue within the chosen area.

The specific ethical issue is data misuse and lack of informed consent in data collection and
processing. The Facebook-Cambridge Analytica case highlights how users' personal
information was harvested without their explicit permission and exploited for political gain.

b. Understand the context and implications of the issue.

• Context:
Facebook allowed third-party developers to access user data through its platform.
Cambridge Analytica acquired this data to create psychological profiles for
influencing voter behavior, violating users' trust and raising questions about
Facebook's oversight.

• Implications:
o For users: Loss of privacy and manipulation of behavior without consent. o
For Facebook: Damage to reputation, financial penalties, and loss of user
trust.

o For society: Undermining democratic processes and trust in digital

platforms.

c. Analyze how organizations have addressed or failed to address the issue.

• Failures:
o Facebook lacked su icient oversight of its data-sharing policies and failed to
enforce safeguards. o The company’s response to the scandal was criticized
for being reactive and insu icient.

• Actions Taken:
o Facebook introduced stricter API controls, enhanced transparency, and
improved data access policies post-scandal. o The scandal catalyzed
global discussions around data privacy, prompting regulatory frameworks
like GDPR.

d. Propose actionable recommendations to tackle similar ethical challenges in the future.

• Implementing privacy-by-design principles to ensure data protection at every stage

of product development.
 • Introducing ethical AI practices to limit manipulation through targeted content.
• Enhancing user education about data rights and privacy settings.
• Establishing independent oversight bodies to monitor data privacy compliance.

b. Abstract (Draft)

In the digital age, data privacy has become a significant ethical concern as businesses
collect and use vast amounts of personal information to enhance their services and
profitability. This project explores the ethical challenges associated with data privacy by
analyzing the Facebook-Cambridge Analytica scandal, a pivotal case that exposed the
misuse of user data without informed consent. The study highlights the ethical dilemmas
faced by technology companies, the implications of data misuse for stakeholders, and the
resulting societal impact. By examining how Facebook addressed this issue, the project
identifies gaps in their response and proposes actionable recommendations to prevent
similar challenges in the future. This analysis underscores the importance of balancing
innovation with ethical considerations in data privacy.

c. Introduction (Draft)

Introduction

The rise of technology and digital platforms has revolutionized how organizations interact
with consumers, o ering unprecedented opportunities for growth, innovation, and
personalization. However, this rapid transformation has brought ethical challenges to the
forefront, particularly in the domain of data privacy. With user data emerging as a valuable
asset, organizations face increasing scrutiny regarding how they collect, store, and use this
information. Ethical lapses in data handling can lead to severe consequences, including loss
of public trust, regulatory penalties, and harm to stakeholders.

This project delves into the ethical implications of data privacy in technology, using the
Facebook-Cambridge Analytica scandal as a case study. The scandal, which unfolded in
2018, revealed how Facebook allowed third-party access to users’ personal data, which was
subsequently exploited by Cambridge Analytica to influence voter behavior during the
2016

U.S. presidential election. This incident not only highlighted Facebook’s lack of oversight
but also underscored the broader ethical challenges faced by technology companies in
safeguarding user data.
The significance of this study lies in its exploration of how organizations can balance
technological innovation with ethical considerations. By examining the
FacebookCambridge Analytica case, the project aims to identify the root causes of ethical
lapses, evaluate their implications for stakeholders, and propose practical recommendations
for ethical data management. The findings aim to provide valuable insights into how
companies can build trust and accountability in the digital era.

Case Analysis

Context

The Facebook-Cambridge Analytica scandal broke in 2018, revealing that Cambridge

Analytica, a political consulting firm, had harvested the personal data of approximately 87
million Facebook users without their explicit consent. This data was obtained through a
third-party app, a personality quiz, which not only collected information from users who
took the quiz but also from their Facebook friends. The data was then used to create
psychological profiles to influence voter behavior during the 2016 U.S. presidential election
and the Brexit referendum.

Facebook faced significant backlash, as it had failed to enforce data-sharing policies and
safeguard user privacy. The incident sparked global debates about data ethics, corporate
accountability, and the need for stringent data protection regulations.

Key Stakeholders

1. Facebook Users:

o Primary victims whose personal data was harvested without their knowledge
or consent. o Impact: Loss of trust, privacy violations, and potential
manipulation of their political beliefs.

2. Facebook (Meta):

o Facilitator of the breach due to inadequate oversight of third-party apps. o

Impact: Reputational damage, loss of users, regulatory fines, and lawsuits.

3. Cambridge Analytica:

o The organization that exploited the data for political purposes. o

Impact: Legal investigations, eventual shutdown of operations, and ethical
scrutiny.

4. Governments and Regulators:

o Responsible for protecting citizens from unethical data practices. o

 Impact: Heightened pressure to create stricter data privacy regulations (e.g.,
GDPR).

5. Broader Society:

o Impacted by potential manipulation of democratic processes.

Ethical Dilemmas

1. Consent and Transparency:

o Facebook users were unaware their data was being collected and used for
political purposes. o Ethical Question: Should companies ensure explicit
and informed consent for all data usage?

2. Corporate Accountability:

o Facebook allowed third-party developers broad access to user data with

minimal oversight. o Ethical Question: What level of responsibility
should companies have for third-party misuse of their platform?

3. Data Ownership:

o Debate over whether users or platforms own the data generated online. o

Ethical Question: Who should have ultimate control over personal data?

4. Societal Manipulation:

o Cambridge Analytica’s use of psychological profiling raised concerns about

manipulating public opinion. o Ethical Question: Where is the ethical
boundary between marketing and manipulation?

Decisions Made

1. Facebook’s Initial Response:

o Denied wrongdoing but later admitted to a lack of oversight.

o Public apology by CEO Mark Zuckerberg.

2. Post-Scandal Actions:

o Introduced tighter API controls to limit third-party access to user data. o

Updated privacy policies to provide more transparency. o Implemented tools
to allow users to manage data permissions more e ectively.

3. Regulatory and Legal Outcomes:

 o Facebook was fined $5 billion by the U.S. Federal Trade Commission
(FTC) for data privacy violations. o The European Union’s General Data
Protection Regulation (GDPR) came into force, emphasizing user consent
and data protection.

Recommendations

1. Strengthen Data Privacy Regulations

• Governments must introduce stricter laws requiring explicit user consent for all data
collection.

• Companies should face higher penalties for non-compliance to incentivize better

practices.

2. Implement Privacy-by-Design Frameworks

• Embed data protection measures into every stage of the product lifecycle.

• Example: Encryption of sensitive data and limited data retention periods.

3. Enhance Transparency and User Control

• Companies should provide clear, user-friendly privacy settings.

• Regularly inform users of how their data is being used and o er opt-out options.
4. Establish Independent Oversight Bodies

• Create third-party organizations to audit data practices and enforce compliance.

• Ensure accountability for companies violating data ethics.
5. Promote Ethical AI and Algorithm Design

• Ensure algorithms used in data analysis adhere to ethical standards, avoiding

manipulation or exploitation of users.

6. Educate Users

• Conduct campaigns to raise awareness about data rights and privacy risks.

• Encourage users to take proactive steps in safeguarding their data.

Conclusion
The Facebook-Cambridge Analytica scandal serves as a cautionary tale about the profound
ethical challenges posed by technology and data privacy. The analysis of this case has
revealed several key insights that highlight the importance of embedding ethics into
business practices, particularly for organizations that manage vast amounts of user data.

The primary ethical dilemma in this case was the lack of informed consent in data
collection and subsequent misuse of personal information for political manipulation. This
breach of trust a ected millions of users and underscored the need for businesses to
prioritize transparency, accountability, and user empowerment in their operations. The
scandal also exposed significant gaps in Facebook's oversight of third-party applications
and its overall data governance framework, leading to reputational damage, legal
repercussions, and a loss of public trust.

From a broader perspective, this case has spotlighted the ethical responsibility of
technology companies in safeguarding user data and maintaining the integrity of democratic
processes. It has also catalyzed global action, with regulators implementing stricter laws
such as the EU's General Data Protection Regulation (GDPR) and other nations
strengthening their data protection policies.

The recommendations proposed in this study—ranging from stronger regulatory

frameworks and privacy-by-design principles to enhanced user education and ethical AI
practices—aim to address these ethical challenges comprehensively. By adopting these
strategies, organizations can build trust with stakeholders, mitigate the risk of future
scandals, and contribute positively to society.

Ultimately, this case underscores the importance of ethics in business, especially in the
digital age. Companies like Facebook must recognize that prioritizing ethics is not only a
moral obligation but also a strategic necessity to sustain long-term success. By fostering a
culture of accountability and respect for user rights, organizations can navigate the
complexities of technological innovation while upholding their social responsibilities.