Facebook-Cambridge Analytica scandal: Tech firms may tighten data rules

Risk of regulatory action could affect Google, Twitter, LinkedIn

Big internet companies and small software developers alike are likely to face scrutiny over how they share customer information in the wake of the scandal involving Facebook Inc and the British election consulting firm Cambridge Analytica.

Lawmakers in the United States and the EU have called for probes into how Facebook allowed Cambridge Analytica to access data on 50 million users and use it to help the election campaign of President Donald Trump. Facebook shares have fallen 8.5 percent this week as investors fear the incident will lead to new regulation.

The scrutiny and the risk of regulatory action could affect Alphabet Inc’s Google, Twitter Inc, Uber Technologies Inc, Microsoft Corp’s LinkedIn and the many others that make their user data available to outside developers.

The interconnections between platforms such as Facebook and Google and third-party services sit at the core of the contemporary internet, enabling people to quickly share articles to Facebook from news websites and log into shopping apps using their Google account.

But the Facebook case has turned the application programming interfaces, or APIs, that enable such data sharing, into a new front in the escalating battle between lawmakers and tech companies over the monitoring and securing of their vast platforms. Threat of sanctions has already prodded companies into better policing of inappropriate commentary on their services.

“All companies are going to need to do a lot more than just laissez faire policy to manage third-party data access moving forward,” said Jason Costa, who helped run APIs at Pinterest Inc, Twitter and Google and now works at GGV Capital. “The days of (the) ‘we’re just a platform and can’t be held responsible for how users use it’ line that many companies use, is no longer going to be tenable.”

APIs have raised privacy concerns since they emerged around 2005, but their adoption and impact has grown rapidly as companies move data online and look for ways to make it more useful.

Uber, for example, in 2016 enabled apps that provided tax and lending services to import driver paystubs. The company did not respond to a request for comment on its monitoring and auditing practices.

The economic dynamic behind APIs is simple: software developers create new tools that benefit big tech companies’ users, and in return they gain instant access to a large number of consumers.

The big platforms say they have built in protection, such as human reviews and automated scanning tools to detect abuse by partners.