Has Facebook Heard of ‘Corporate Social Responsibility’?

By Dr. Todd Bacile | September 30, 2013

Facebook & Corporate Social Responsibility

For such a young company, Facebook already has created numerous debates about its ethical / legal use of consumers’ information and questionable business decisions. Today’s businesses are expected to maintain a certain level of corporate social responsibility (CSR), defined as a company being responsible for its actions – socially, ethically, and environmentally. CSR often captures headlines in the environmental context. But, it is the ethical context where Facebook skates on the proverbial thin ice.

It seems there is a fine line between a firm being innovative versus unethical. On the one hand, Facebook has continued to push the envelope to develop technologies and a marketing platform never before possible. On the other hand, the push toward new and innovative technologies at times borders on invasive or illegal behavior. The following is a brief list of some of Facebook’s marketing / managerial debacles and legal challenges.

Beacon

The first ad platform Facebook created was called Beacon, which was quickly shut down due to the illegal use of users’ private information. Beacon transmitted data from external websites to Facebook in an effort to create targeted ads. Beacon also made updates in users’ news feeds to announce certain purchase activities. The unethical angle was that Beacon was publishing users’ private information without explicit consent. Ultimately, the courts forced the termination of Beacon and made Facebook cough up a $9.5 million settlement.

The class action lawsuit (Lane v. Facebook) was born from the following sympathetic tale: Sean Lane purchased an engagement ring on Overstock.com. Unbeknownst to Lane, Overstock was one of 44 firms participating in the Beacon system. As soon as Lane bought the ring, Beacon sent purchase data to Facebook, where the social giant then posted a status update of the purchase details in Lane’s profile! Lane began receiving congratulatory wall posts from friends. The only problem was that he had yet to pop the question. Awkward! And illegal according to the courts.

Sponsored Stories

This is how Sponsored Stories worked: a user ‘Liked’ a brand, which then enabled the brand to create an ad-like proposition to that user’s Facebook friends. The ad-like template featured the user’s name and image; and looked as if the user was recommending the brand to friends. This design was an attempt to feature an ad that appeared to be organic consumer support (because consumers hate, distrust, and ignore most ads). There was the problem: users claimed Facebook used their likeness to “trick” friends with an ad – without explicitly telling the user.

Taking this a step further, Facebook allows minors to create a profile and use the social network. Facebook’s Sponsored Stories came under attack when some parents began seeing their minor children ‘Liking’ various companies or products, then seeing their child’s name and image used in the ads to target friends. Facebook was forced to kill Sponsored Stories due to consumer backlash and legal pressures: the courts ordered a $20 million settlement.

Postmortem Profiles

Question: what happens to your Facebook account, images, videos, and content when you die? A possible answer: Facebook maintains it status quo of using a person’s information in advertisements. People actually have seen Sponsored Stories featuring a deceased friend. Really.

Then there is the story of Karen Williams and her deceased son. Williams fortunately had her son’s Facebook user name and password. She wanted to review his photos and messages to friends. However, when Williams contacted Facebook to ask that the deceased’s profile be left open, Facebook administrators immediately changed the password and locked her out of the account. The reason: Facebook was concerned about user privacy. Williams pursued and received a court order to allow her access to her son’s account.

These stories have amplified the debate of who owns a person’s digital assets upon death. Facebook has claimed that such instances were accidental; and has since created a memorialized state option. Accidental or not, new legislation is attempting to address postmortem profile access and ownership.

Facebook’s IPO

Facebook has been under the microscope for allegedly misleading investors prior to its initial public offering. A class action lawsuit claims Facebook execs purposely inflated growth forecasts in an effort to manipulate the IPO stock price upward. More than 40 lawsuits have been filed by investors regarding the IPO.

Gee whiz… whether it is marketing programs, privacy issues, or managerial decisions on finance, Facebook appears to have a history of turning a blind-eye to anyone and everyone in pursuit of its own corporate goals. And that, my friends, is the antithesis of corporate social responsibility.

Dr. Todd Bacile (@toddbacile) is a Marketing Professor at Loyola University New Orleans and holds a Ph.D. in Marketing from Florida State University. Social Media Marketing Magazine ranks him as one of the Top 100 Marketing Professors on Twitter. Have a question or comment? Post it here and you will receive a response.