"mood" experiment will face probe from data regulators in the
United Kingdom. Per Reuters that quoted a Financial Times article,
U.K.'s Information Commissioner's Office (ICO) will investigate
whether the social network broke data protection laws to conduct
the psychological experiment.
Earlier, in 2012, Facebook and Cornell University conducted the
experiment on nearly 689,000 randomly selected users to determine
their mood swings over positive or negative feeds. However, it is
alleged that Facebook conducted the experiment without any explicit
consent from the users.
"research" among the ways it can use user's information at the time
the experiment was conducted. However, the company argued that it
had users' consent to carry out the test, based on broader language
in the policy.
Furor over the experiment broke out soon after its results were
published in the March issue of the Proceedings of the National
Academy of Sciences. The experiment concluded that users who were
shown negative content were more likely to produce negative posts.
On the other hand, users in the positive group were more likely to
create more upbeat posts.
The experiment worked for Facebook as the social network was
successful in influencing people's emotions. Facebook, however,
stated that it was an endeavor to improve its service and it never
intended to hurt users' sentiments.
ICO plans to interrogate Facebook officials over the experiment.
Since Facebook has its European headquarters in Dublin, Ireland,
Irish data protection agency is also expected to join the probe.
Per ICO, it is too early to conjecture about what part of the law
Facebook has violated. The regulator will now collect data to
determine how much personal information was used for the experiment
and whether Facebook took consent of the users. ICO can force
Facebook to change its policies and also impose a fine of £500,000,
if found guilty.
We believe that the probe will not have any significant impact on
Facebook's share price in the near term. Domestic regulator, The
Federal Trade Commission, has not shown any interest in the uproar,
much to the relief of the company. Moreover, such probes take a
long time to complete. Hence, a negative outcome may not have any
significant impact on user activity at the end.
However, the whole issue certainly reflects the lack of strict
regulation for social media companies such as Facebook,
that collect and manage huge user database. Incidents such as these
are bound to adversely impact the popularity and credibility of the
social media platform.
Currently, Facebook has a Zacks Rank #3 (Hold).
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