CCPA Now in Effect

The California Consumer Privacy Act (CCPA) went into force this week, but enforcement will be delayed for six months.  “We’re going to help folks understand our interpretation of the law,” said California Attorney General Xavier Becerra.  “And once we’ve done those things, our job is to make sure there’s compliance, so we’ll enforce.”

Microsoft indicated that CCPA will be used as a national standard. Microsoft has already extended EU GDPR compliance globally and called privacy “a fundamental human right.”

“CCPA marks an important step toward providing people with more robust control over their data in the United States,” wrote Microsoft’s Chief Privacy Officer Julie Brill.  “It also shows that we can make progress to strengthen privacy protections in this country at the state level even when Congress can’t or won’t act.”

CCPA requires firms to be transparent in how they collect and use consumer data.  Individuals also have the option to block sales of personal data.  However, “Exactly what will be required under CCPA to accomplish these goals is still developing,” wrote Brill.

Microsoft supports a national privacy law which cover “more robust accountability requirements” including minimizing data collection, transparency around how data is being used, and “making them more responsible for analyzing and improving data systems to ensure that they use personal data appropriately.”

Facebook is hedging, saying “we do not sell people’s data” without acknowledging that its business is based on monetizing member data and that it has a poor history of controlling partner data collection on its platform.

Salesforce CEO Marc Benioff called Facebook the “new cigarettes for our society,” which undermines societal trust.  On CNN’s Reliable Sources, Benioff called for Facebook to be regulated or split up.  “They’re certainly not exactly about truth in advertising.  Even they have said that.  That’s why we’re really in squarely a crisis of trust, when the core vendor themselves cannot say that trust is our most important value.  Look, we’re at a moment in time where each one of us in every company has to ask a question: What is our highest value?”

“I expect a fundamental reconceptualization of what Facebook’s role is in the world,” continued Benioff.  “When you have an entity that large with that much potential impact, and not fundamentally doing good things to improve the state of the world, well, then I think everyone is going to have it in its crosshairs.”

Salesforce: Trust is the Key Value for Tech Companies

Salesforce: Trust is the Key Value for Tech Companies

Speaking to Jim Cramer on Mad Money, Salesforce CEO Marc Benioff argued that for technology companies, the key value is no longer the great idea, but trust:

In technology over the last two decades, the most important thing has been the idea. That is, the best idea wins.   That has been what gets you funded, that’s how you grow your company, that’s been your highest value: the best idea wins. No longer true.

The current highest value is trust, and if trust is not your highest value, if the most important thing to you and your company is not trust, you need to look again, and that’s what’s happening with these companies today.

Salesforce CEO Marc Benioff

Benioff observed that a lack of trust is eroding Silicon Valley companies such as Facebook.  “Their executives are walking out, employees are walking out,and that happens with a lot of companies in tech right now. We’ve had a lot of walkouts this quarter.  And the reason why is because it’s kind of amessage to the executives: it’s time to transform.”

“Every company has to hold themselves to a new level of trust, and if your brand is not about trust, you’re going to have customer issues, and you can see that in that brand,” observed Benioff.

And trust has long been part of Salesforce’s value proposition.  The firm emphasizes it’s 1:1:1 philanthropy program (Donating 1% of technology, people, and resources) which has been adopted as a model by other companies.  Salesforce also promotes local nonprofits at Salesforce events, emphasizes Trailhead and meetups for skills advancement, embraced a San Francisco tech company tax to address homelessness, called for a US GDPR to protect privacy, raised womens’ wages to address a pay equity gap following a self-audit, and spoke out against anti-gay legislation.  Under a short-term profit-maximization model, these activities make little sense, but under a longer-term stakeholder’s approach, they make perfect sense.

Trust is based on a stakeholders approach to corporate governance.  It recognizes that Milton Friedman’s stance against social responsibility (“there is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits so long as it stays in the rules of the game, which is to say, engages in open and free competition, without deception or fraud.”) is wrong.  A stakeholders approach recognizes that employees, customers, partners, investors, and the general public all place value on companies that take a long-term view of their role in society.  Simple profit maximization is a short-term approach which fails to recognize that you can’t attract the best employees or close multi-million dollar deals if you are not trusted.

And you can see this in the stock price growth of Facebook and Salesforce over the past five years.  Facebook’s stock price outpaced Salesforce for the past five years, but once Facebook lost trust, its stock price declined.

Salesforce and Facebook both had strong stock price growth over the past five years, but Facebook retreated this year after it lost trust amongst stakeholders.
Salesforce and Facebook both had strong stock price growth over the past five years, but Facebook retreated this year after it lost trust amongst stakeholders.

Facebook Reaps What It Sows

Facebook dropped 20% in one day as the ongoing news about their misuse of personal data began to hit their bottom line a few weeks ago.  Here is a guerilla protest campaign in London which encapsulates their issues:

The problem at Facebook is that they forgot that they were there for their members not their advertisers.  The idea was free content (news, fake news, and social), no editorial review, and monetization of the data exhaust from their platform.

When that happened, truth and privacy became irrelevant.  They can whitewash their actions and pretend that the problems are exogenous to their company, but hiring editors is only the beginning of excising the rot that rests at the center of Facebook’s business model.


Source: Instagram images from ProtestStencil