As business and technology become more and more integrated, the question of ethics pops up quite frequently. How much information should we be allowed to collect about customers? What information is considered private? Should companies be allowed to sell that information to third parties? Unfortunately, these are not simple questions to answer. This is because for the most part, customers are in the dark. They are unaware of how much information companies collect about them and what they do with that said information.

That being said, there have been multiple scandals involving major companies misusing data that have caused an uproar among consumers. Many of these cases ended in legal action being taken and consumers losing their trust in notable companies. If you are curious as to which companies were caught in these sticky situations, keep reading!

Facebook’s Cambridge Analytica Data Scandal

Earlier this year, Mark Zuckerberg was brought in front of the Supreme Court for breaching the trust of of millions of Facebook users. It was reported in March that Cambridge Analytica, a data mining firm that worked alongside President Trump’s campaign, obtained information from approximately 50 million users’ profiles. This data they obtained, gave Trump’s campaign an unfair advantage when it came to targeting voters. On the surface, this may seem like a simple way to develop psychographic profiles of consumers (or voters), but the major difference is consent. People were never notified that the information they were sharing would be used for political targeting; thus, it was a major breach of trust that resulted in severe implications for Facebook.

Grindr’s HIV Status Sharing Scandal

Grindr, a dating app made for gay and bisexual men, found itself in an incredibly scandalous situation 6 months ago. When creating their profile, users can choose to disclose their HIV status on their profiles so possible matches can be aware of their status and last test date. Turns out, it was more than just possible matches who had access to this data. Without the users’ consent, this information was also sharing with Apptimize and Localytics, two companies who specialize in optimizing and testing mobile apps. This caused a massive uproar amongst the LGBTQ Community and beyond because many felt this was an utter invasion of privacy. Although the companies weren’t advertisers or paying for this information, users still felt it was wrong for Grindr to share such personal medical information.

Bose Connect App Scandal

Bose, a popular audio equipment company, developed an app called Connect for their users. The app allows users to seamlessly connect and switch to multiple devices, track your heart rate, and more. What users were not aware of was that the app also tracked their personal listening history and shared that information with third party companies. Upon first thought, it doesn’t seem like a big deal for a company to know what music you listen to, but it is much more than that. Bose can easily report to companies if you are listening to religious Podcasts, LGBTQ talk shows, and other sensitive information. This goes to show that your listening history may be more confidencial that you think.

The Risks

With such major companies facing legal consequences for their misuse of data, their competitors should be sure to not follow in their footsteps. In fact, these situations should be used as teaching moments. Some major lessons or take aways from these scandals are 1) Always inform your users that their data is being collected, 2) Tell your users what their data is being used for, and lastly 3) Respect and protect data that is considered highly confidential. With more and more importance being placed on data privacy, companies need to ensure they are on the right side of things. The last thing you want is a PR nightmare on your hands like Facebook, Grindr, and Bose did! So be transparent with your customers, I promise you won’t regret it.

About The Author:

Nikitha Lokareddy is a recent 4.0 graduate of W.P. Carey School of Business and currently works for Markitors, a digital marketing agency. She is also an advisor to Online Data Science Master's Degrees and is an avid playlist maker and coffee drinker.