Ethical Dilemma in Facebook Inc.

Facebook Inc. is arguably the biggest social media site in the world right now with millions of users in every part of the globe. The site, known for socializing, sharing images, videos, comments, and much more, contains millions of social media profiles, each carrying secret or private information. The hype around social media usage, for many people, involves updates on personal life through various forms online on the Facebook platform. While doing this, most users are usually oblivious of whether or not their personal information is at risk of being taken through certain processes or applications, and used for the benefits of third parties. This kind of oblivion is attributed to ignorance, unawareness of privacy laws, lack of information on matters of online privacy and much more. The enlightenment on the need to protect one's information varies across the globe with users in some parts of the world not knowing such issues or just ignoring the provisions laid down to protect them. However, the laws in the US on privacy and breach of private information are clear ranging from hospital data to private online information about all individuals. A common tort in the country allows an individual or entity to file a lawsuit against another individual or company when they realize an invasion of privacy or breach of the same. The numerous legal concepts related to privacy issues form a net of conditions aimed at protecting users and their information at an era of technological advancement in which data can be stolen anytime through hacking and associations with other online applications. For tech giants, including Facebook, such lawsuits result in a public backlash, complaints, and lawsuits that are damaging. The consequences have to be addressed by the right people affected including the shareholders whose returns are affected negatively when the company image hits the airwaves for the wrong reasons. All companies have a social responsibility to protect users' private or personal information and failure to do this has serious legal consequences and court battles. This paper presents a privacy breach as an ethical dilemma for Facebook, the related impacts on the shareholders and how the issues were addressed.

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Facebook has dealt with numerous privacy problems related to a privacy breach, loss of personal information of users through hacking, allowing associations with other online applications. Particular applications connected to Facebook have been accused of tricking unsuspecting users into agreeing to certain terms and conditions without many explanations (Dalsgaard, 2008). Once the user green light is given, these applications end up harvesting personal data. These include email addresses, passwords, personal pictures, addresses, account numbers, phone numbers, and card numbers for some users. Such information can allow any malicious person or entity to do anything with one's information including theft, cyberbullying, burglary, identity theft, online harassment, and commercial usage of email addresses among others.

The involvement of Facebook in the 2016 US elections has been widely debated leading to full investigations into what really happened when the Russian entities were claimed to have interfered with the outcome of the election. Following the elections, the congressional pressure overpowered Facebook when details emerged that the tech giant had sold personal information to Russian-linked companies. The tech company then handed over details of around 3,000 ads which it sold to certain Russian companies. Before the accusations and revelations which led the company to hand over such details, the chief executive officer, Mark Zuckerberg, had fervently insisted against manipulation issues that were thrown towards Facebook. Zuckerberg termed the accusation as a crazy idea before pressure amounted to shocking revelations. In a long statement, Facebook revealed its role in protecting the integrity of the people and its involvement in the democratic process through values of which they were proud of. Facebook as a company, had insisted on its role in transparency in relation to ads sold for political interests. The transparency would mean that each user would be able to access the advertiser's page, the amount paid for the add, and the type of content being advertised. While (Mahat, 2016) laws prohibit foreigners from contributing or sponsoring election-related activities, Facebook was found to have taken money for political ads from Russian advertisers and other foreigners despite being an American company that should follow the law.

The ethical issues that Facebook has are intertwined in its seemingly troublesome model of operation. The legal and ethical controversies surrounding this company were allowed to take place in its operation model which in itself is troublesome. This is because Facebook is hidden under free services online, but it collects private information from its users and then monetizes it by selling to third parties or companies. Tied to this controversy is the fact that fake news sites and accounts have risen at alarming rates in various countries, some of which are operated by bots. Such bots are also responsible for collecting information from user profiles. Due to pressure from the government of countries like France and Germany, fake accounts were blocked, and the bots were no longer in operation. The issues censorships have led certain countries to criticize Facebook, and some even ban it. China has been active in banning social sites because of certain sensitive political areas. In Vietnam, it is prohibited to criticize the government, and for this reason, people get arrested when they channel their criticisms of the regime on Facebook. In so doing, the freedom of expression is interfered with, and this brings a grey area between Facebook usage policies and the legal aspects of some countries in which it operates.

Facebook has faced accusations that it uses innocent games to harvest the personal information of users. Other platforms for harvesting information include quizzes and third party online applications linked to Facebook. Through such mobile and desktop applications, users share their educational background, political or religious affiliations, work history, personal interests and much more. A scandal arose whereby a UK based private company known as Cambridge Analytica was involved in mining data with interests in participating in influencing the dynamics of American politics through statistics gained from Facebook. Cambridge Analytica used quizzes that were answered by friends of friends, meaning anyone who answered the quizzes gave consent unknowingly. During that period of harvesting information, 50 million profiles were accessed illegally and used by the president Donald Trump campaign troupes during the election campaigns.

Shareholders and Needs Affected by the Dilemma

Facebook has an excess of 1.52 billion users who actively use the site on a daily basis. The financial returns of the site are so huge, making it the most profitable tech company in the world. Due to that, it attracts institutional investors and mutual funding. It has both class A and B shareholders who get the heat during tough times like data breach cases. The individual shareholders include Mark Zuckerberg, Dustin Moskovitz, Eduardo Saverin, Jan Koum, Sheryl Sandberg, and Michael Schroepfer among others.

Mark Zuckerberg is the founder, CEO, and the face of Facebook, who holds 11.92 million class A shares in the company. According to Facebooks' SEC filings of 30th August 2018, Zuckerberg holds the shares via a series of funds. In addition, he owns 392.71 million shares of class B category as stated in the company's proxy statement of 13th April 2018. As the major individual shareholder owning 53.3 percent of Facebook voting rights, Zuckerberg is the primary target when controversial issues hit the tech giant. In all major cases, he has been the one on the limelight addressing issues of great concern and the mode of operation of Facebook.

Moskovitz is also a cofounder of Facebook who holds both class A and class B shares of the company. In addition to that, he is the founder of Asana software Management Company. According to 2018 proxy filings, Moskovitz holds 48.9 million shares of class B category, and an undisclosed amount of class A shares.

Eduardo Saverin is a Facebook investor and a Brazilian entrepreneur who holds class A shares worth 6.1 million shares, according to proxy statement of April 2018. He also owns 47.2 million shares of class B category accounting for 6.5 percent of the company voting power. Jan Koum is another shareholder having 14.2 million class A shares of Facebook inc according to Proxy statement of 13th April 2018. Koum is the owner of Whatsapp messaging service that was acquired in 2014 by Facebook. He sits in the company's board of directors but has plans of quitting. Sheryl Sandberg holds 1.5 million indirect shares via trust as well as two million shares of class B category. Sandberg's experience in the US Treasury Department as the chief of staff, and Google Inc as vice president in the global sales and operations department, made her fit best the position of Facebook's chief operating officer. When operational problems occur, Sandberg is found at the center of operations and it is her role to provide a briefing to Zuckerberg and the other shareholders about it.

Serving as the company's chief technology officer and a shareholder, Michael Schroepfer holds 990,725 shares of class A category according to Facebook's proxy statement of 13th April 2018. He also holds shares in the class B category worth of 716,987 shares. He is in charge of the technological structure of the company and is responsible for all the technological developments in Facebook Inc.

The shareholder needs of Zuckerberg as the owner is to ensure that the company progresses along its value chains, ethics, and service delivery to its users. He ensures that the company does what it takes to keep user's data safe from breach and target by malicious parties through implementing certain strategies that can make this happen. On the business side of things, Zuckerberg is responsible for ensuring that the company makes profits and the financial flow is well-monitored every fiscal year and posted. The issues of data breach have put Zuckerberg under pressure from the public and governments, leading to a lot of measures being called upon to help protect user information from potential threats. Zuckerberg has faced a lot of criticisms in the public eye because he is the face of the company and is in charge of most of its operations. Being the majority shareholder, he his needs to forge a great reputation with other companies has suffered greatly at some points in the past because of breach of privacy laws.

Because of tainted name, companies like Mozilla, Space X and Tesla halted their posting on Facebook platforms. The postings from such related companies are linked to monetary benefits that Facebook as a company gains. When stopped, even for a few hours, the economic implications are huge and the effects ripple past what the eye can see. In that effect, it interferes with the role of the CEO in terms of gaining economic benefits and also forging mutual business relationships with other companies. Due to backlashes from the public, there has been a movement on twitter called "delete Facebook" following accusations that the company has failed miserably to handle private information of its users. Irate users of the platform have attempted numerous times to urge their friends to deactivate their Facebook accounts leading to a considerable effect on the company's numbers in some parts of the world. Influential individuals including Brian Acton...