Is there anyone who forgot Facebook’s Cambridge Analytica scandal case on data privacy? If you haven’t then the Senate committee is researching this case still.!
As we all know, Facebook has been beset by scandals for years – sometimes on election interference, then other times concerns over privacy. Despite everything, Facebook decided to launch its cryptocurrency, Libra coin which is something lawmakers didn’t digest.
Accordingly, lawmakers are still not ready to accept the fact that Facebook is visioning to revolutionize the current form of money and hopes to facilitate an open banking facility to unbanked and underbanked.
It’s hard to trust Facebook now!
The hearing was set on July 16, 2019, on Capitol Hill in Washington, DC wherein Calibra’s CEO David Marcus presented to testify Facebook’s plan of upcoming cryptocurrency, Libra, the privacy concerned involved and many other aspects involved. Just to remind, Libra is a stablecoin backed by a consortium of companies including PayPal, MasterCard, eBay, Visa, Vodafone and more – whereas the Calibra is a digital wallet, enable to store, transfer and buy Libra coin.
According to the testify document submitted by Mr.Marcus ahead of the Senate hearing, Facebook Inc. has no involvement with Libra’s financial aspect – as such, the same was being discussed during the hearing. Mr.Marcus insisted that user’s financial data will be only available at the Calibra wallet and Facebook has no access to user’s data or financial information – besides, it adds that Facebook Inc., will be only one of the members of Libra Associations just like other private players; eBay, Vodafone, etc. For those who don’t know Libra Association is a non-profit organization, designed for Libra and backed by several private companies from across the various industries including, telecommunication, finance, insurance, media and more.
Senate Hearing Day 1 Opens Privacy Issue
During the hearing day 1, Lars Seier Christensen who is the chairman of Concordium, the world’s first ID/KYC-ready business blockchain network, states that one of the key issues relies on not trusting Libra is “security” which ranges from national security to investor protection.
Similarly, Senator Sherrod Brown expressed his concern;
The company had shown “through scandal after scandal that it doesn’t deserve our trust”.
In a continuous talk, Mr.Brown states that it would be a “delusional” to think if an individual can trust social media firm with their “hard-earned” money. While Facebook visioning about helping underbanked an unbanked, Mr.Brown points out that;
“We’d be crazy to give them a chance to let them experiment with people’s bank accounts.”
Facebook’s past scars are still visible. The worst memory of Cambridge Analytica privacy on Facebook is just too hard to rub which led another senator passed harsh comment. Republican Senator Martha McSally expressed her concern as – “I don’t trust you guys”. She said;
“Instead of cleaning up your house you are launching into a new business model.”
Mr.Marcus tried to explain how Facebook is keeping his social network aside with Libra. He said, “Facebook will only have one vote”.
“The way we’ve built this is to separate social and financial data because we’ve heard loud and clear that they don’t want those two types of data streams connected, so this is the way the system is designed”
Whatever the case is – the whole hearing put Facebook’s Libra into a dilemma. According to the hearing notes, Mr. Marcus followed his tone of explaining Libra as an open-source and a cryptocurrency platform. On the other hand, Calibra is a digital wallet but, it is meantime a Facebook’s product which is by far the most powerful social network. One senator pointed at Marcus, saying “you’re not doing this for fun”.
Although Facebook began this plan in the United States, it is receiving a welcome move from other countries too, such as Switzerland. This is quite true seeing Testify document of Mr.Marcus which defined this as follow;
I am proud that Facebook has initiated this effort here in the United States, Marcus writes. I believe that if America does not lead innovation in the digital currency and payments area, others will.
Facebook facing Fine of $5Bln
Further, it’s worth to note that reports highlighting “Federal Trade Commission (FTC)” has approved a fine of around $5bn on Facebook for Cambridge Analytical privacy violations. Concerning this, Representative David Cicilline, Democrat from Rhode Island states that; “The FTC just gave Facebook a Christmas present five months earl”.
“It’s very disappointing that such an enormously powerful company that engaged in such serious misconduct is getting a slap on the wrist.”
Concerning about this scandal issue raised during a hearing on Tuesday, July 16, 2019, Mr.Marcus responded that “We know we need to take the time to get this right,” – he will again testify before the House Financial Service Committee on Wednesday (July 17, 2019)for day 2.
Combining the mixed statements from hearing – both from tech brains and those that brutally expressed their outright distrust of Facebook, its exciting to wait and catch the next day’s hearing and the outcome of it.
Although Mr.Marcus tried his best on explaining how Facebook isn’t at all involved in Libra and Calibra as far as the user’s data is concerned – it’s quite hard to believe on facebook seeing its past record. In fact, during early July, Mr.Marcus stated that “user’s don’t have to trust Facebook to use Libra”.
‘Bottom line: You won’t have to trust Facebook to get the benefit of Libra. And Facebook won’t have any special responsibility for the Libra network,’ Mr.Marcus said. ‘But we hope that people will respond favorably to the Calibra wallet. We’ve been clear about our approach to financial data separation and we will live up to our commitments and work hard to deliver real utility.’
However, whether or not Facebook will get success in the US is still a matter of time. Recently, an analyst Brent Thill of Jefferies states that “it doesn’t matter if Facebook’s Libra fails. Mr.Thill states that
“he doesn’t believe Facebook’s Libra will have a lot of success in the United States because 80% of US Facebook users have no interest in digital currency.”
Bearing in mind that Facebook doesn’t have a clean track record of privacy over user’s data, what do you think Libra’s next chapter be.? Do you think it will receive positive remarks from US regulators or hard criticism that led Facebook to decide on its next move.? Let us know your opinion in the comment below.