Timing sees Facebook avoid multi-million GDPR fine from UK

16 July 2018 Consultancy.uk

Facebook is set to be fined £500,000 by the UK for its part in the Cambridge Analytica scandal. Britain’s Information Commissioner has announced the global firm will be hit by the maximum amount possible according to the UK’s Data Protection Act.

The Facebook–Cambridge Analytica data scandal saw the personally identifiable information of 87 million Facebook users collected – along with a reportedly a much greater number that Cambridge Analytica began collecting in 2014 – before allegedly being used to attempt to influence voter opinion on behalf of politicians who hired Cambridge Analytica. Following the discovery, Facebook apologised amid public outcry and rising stock prices. The way that Cambridge Analytica collected the data was called "inappropriate", while Facebook CEO Mark Zuckerberg appeared before the US Senate for questioning – something the technological tycoon refused to do with UK MPs.

In spite of this, the UK’s Information Commissioner has still levied a £500,000 fine against Facebook as punishment for its transgression. The fine is for two breaches of the Data Protection Act, with the Information Commissioner’s Office (ICO) concluding that Facebook had not adequately safeguarded its users’ information, while failing to be transparent about how that data was harvested by others.

Timing sees Facebook avoid multi-million GDPR fine from UK

Elizabeth Denham, the Information Commissioner said, “Facebook has failed to provide the kind of protections they are required to under the Data Protection Act [which was introduced in 1998]. Fines and prosecutions punish the bad actors, but my real goal is to effect change and restore trust and confidence in our democratic system.”

The ICO inquiry has also resulted in warning letters being sent to 11 political parties – every UK party with an MP in the House of Commons as of March 2017, when the investigation began – and notices compelling them to agree to data protection audits.

While the fine is the maximum available to the ICO, and is supposed to be a severe smack down for offenders of data privacy violations, Facebook will be considering itself fortunate, not only because in the age of billion pound internet behemoths, £500,000 is the revenue Facebook raked in every five and a half minutes in Q1 2018, but also because of the timing of the breaches. Had the Cambridge Analytica debacle come to light months later, the ICO would have likely been able to call on the European General Data Protection (GDPR) to issue a far more severe blow.

GDPR famously caps fines at the higher level of £17 million (€20 million) or 4% of global turnover – depending on which is largest. In Facebook’s case, 4% of global turnover amounts to a colossal £1.4 billion ($1.9 billion).

In April, a month before the enactment of GDPR, Facebook announced a raft of new privacy measures. It was quickly noted that this roster of new rules was in fact just an expansion of compliance measures expected for the EU’s GDPR – though it expanded these standards to apply beyond EU citizens.

Related: GDPR preparation has cost FTSE 350 businesses around $1.1 billion.

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Despite industry disruption televised sport still draws audiences

24 April 2019 Consultancy.uk

Despite the disruption wrought on most areas of traditional broadcasting by streaming challengers, sports remains a major draw for audiences of television networks. This is particularly true of viewers who bet money on sporting events, with those that have skin in the game considerably more likely to follow the event on a television screen.

Arguably the true opiate of the masses, for centuries organised sports have been a major draw for hordes of fanatical spectators, from the grand coliseums of Ancient Rome to the more understated greens of local cricket grounds. The advent of television in the 20th century took this to a new level, allowing for widespread visual access to major sporting events, and sowing the seeds of a multi-billion industry in the process. Yet while watching sport remains a key pastime for many, changing consumer preferences and new technologies are affecting the traditional sport distribution channel of TV.

To better understand trends in the sporting broadcast market, Deloitte recently released an article titled ‘Does TV Sports have a Future?’ as part of its wider ‘Technology, Media, and Telecommunications Predictions 2019’ report into telecommunications trends. The conclusions in the piece are based on the firm’s own survey of 1,062 US-based respondents.

More men than women watch sport

Traditional television has in recent years begun to lose out to streaming and on demand services, resulting in a generation that is watching considerably less television. The shift in consumer sentiment has caused traditional TV companies consternation as well as shifts in business models. The average Millennial now watches 42% fewer minutes per week of TV in 2018 than they did in 2010. Yet not all areas of the traditional television market have been as hard hit by the shift, and sport is one of them. This contradicts previous studies which may have suggested that Millennials were abandoning ‘old’ media for their sport viewing.

One reason for this could well be sports betting, which means that many of the people watching the event are keen to see how their punt is faring, in play. According to Deloitte, 78% of male sport viewers, and 64% of their female counterparts would be more likely to tune in to a live event if they had bet on it.

The study found that sport gambling remains a key fixture in the gambling industry as a whole in the UK. In the United Kingdom in 2017, sports betting had £14 billion in turnover. In the four Nordic countries, meanwhile legal gambling of all kinds was an approximate €6 billion industry in 2015. In the US, meanwhile, the industry as a whole is worth around a quarter of a trillion dollars – with sports betting figuring at around 40% of that total. The industry is projected to see growth of 9% over the coming three years.

Betting on sports is associated with watching sports on TV for more than five hours on a typical weekday

However, while the gambling industry does indeed seem to have some impact on television engagement, it would be dangerous to overstate this as a positive, and such a conclusion might also put the cart before the horse. Deloitte’s study found that ‘super-superfans’ – those who watched more than five hours on a typical weekday – were more likely to gamble than average viewers.

Of those who watch more than five hours of sport per day, only 4% do not bet. Of those, 2% do not currently bet, or have never bet, respectively. Again, it could be asserted that these people are engaging with televised sport, and thus keeping the advertising-based industry afloat, due to the betting they participate in. However, it could equally be argued that they are exhibiting compulsive behaviour in spending such a large amount of time viewing sport in the first place – behaviour which would leave them as easy prey for gambling firms, who can now milk them for profit.

But where is all this set to lead? According author Duncan Stewart, the potential profitability of this model means it is likely to be exported from the UK in the coming years.

Steward concluded, “As a thought experiment, one can imagine a 30-year-old American man in the year 2025… watching a football game on the TV set, smartphone in hand. He can bet on the match at any point, modify his wager, buy back a losing wager, bet on the outcome of individual plays or individual stats such as the number of passing yards by the quarterback—all in real time, and all tailored to him. Ads could be served that are customised for him, informed by his betting and attention, and watching would have to be 100% live. The broadcaster or betting site could not only charge more for ads seen by such an involved viewer, but even have a share in (or own outright) the profits from the betting/video stream … at margins much higher than the usual for TV broadcasting. To an American, this sounds like science fiction, but in the United Kingdom, these solutions (or variations of them) are available today.”