BUS4301- Term 2 AY2023/24

Ethical Case Study Analysis - Individual Assignment

You are required to write and submit an individually written case study essay on the captioned case.
Your essay should be at least 800 words, and no more than 1,200 words long (exclude citations), and
must be submitted via Turnitin on the course web site on Moodle before the date indicated by your
instructor.

The deadline for submission is 23.59 hours on 29 March 2024.

Case: Whistle-Blower Says Facebook ‘Chooses Profits Over Safety’

(Source: https://www.nytimes.com/2021/10/03/technology/whistle-blower-facebook-frances-
haugen.html)

John Tye, the founder of Whistleblower Aid, a legal nonprofit that represents people seeking to
expose potential lawbreaking, was contacted this spring through a mutual connection by a woman
who claimed to have worked at Facebook.

The woman told Mr. Tye and his team something intriguing: She had access to tens of thousands of
pages of internal documents from the world’s largest social network. In a series of calls, she asked for
legal protection and a path to releasing the confidential information. Mr. Tye, who said he understood
the gravity of what the woman brought “within a few minutes,” agreed to represent her and call her by
the alias “Sean.”

She “is a very courageous person and is taking a personal risk to hold a trillion-dollar company
accountable,” he said.

On Sunday, Frances Haugen revealed herself to be “Sean,” the whistle-blower against Facebook. A
product manager who worked for nearly two years on the civic misinformation team at the social
network before leaving in May, Ms. Haugen has used the documents she amassed to expose how
much Facebook knew about the harms that it was causing and provided the evidence to lawmakers,
regulators and the news media.

In an interview with “60 Minutes” that aired Sunday, Ms. Haugen, 37, said she had grown alarmed by
what she saw at Facebook. The company repeatedly put its own interests first rather than the public’s
interest, she said. So she copied pages of Facebook’s internal research and decided to do something
about it.

“I’ve seen a bunch of social networks and it was substantially worse at Facebook than what I had seen
before,” Ms. Haugen said. She added, “Facebook, over and over again, has shown it chooses profit
over safety.”

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Ms. Haugen gave many of the documents to The Wall Street Journal, which last month began
publishing the findings. The revelations — including that Facebook knew Instagram was worsening
body image issues among teenagers and that it had a two-tier justice system — have spurred criticism
from lawmakers, regulators and the public.

Ms. Haugen has also filed a whistle-blower complaint with the Securities and Exchange Commission,
accusing Facebook of misleading investors with public statements that did not match its internal
actions. And she has talked with lawmakers such as Senator Richard Blumenthal, a Democrat of
Connecticut, and Senator Marsha Blackburn, a Republican of Tennessee, and shared subsets of the
documents with them.

The spotlight on Ms. Haugen is set to grow brighter. On Tuesday, she is scheduled to testify in
Congress about Facebook’s impact on young users.

Ms. Haugen’s actions were a sign of how Facebook has turned increasingly leaky. As the company
has grown into a behemoth with over 63,000 employees, some of them have become dissatisfied as it
has lurched from controversy to controversy over data privacy, misinformation and hate speech.

In 2018, Christopher Wylie, a disgruntled former employee of the consulting firm Cambridge
Analytica, set the stage for those leaks. Mr. Wylie spoke with The New York Times, The Observer of
London and The Guardian to reveal that Cambridge Analytica had improperly harvested Facebook
data to build voter profiles without users’ consent.

In the aftermath, more of Facebook’s own employees started speaking up. Later that same year,
Facebook workers provided executive memos and planning documents to news outlets including The
Times and BuzzFeed News. In mid-2020, employees who disagreed with Facebook’s decision to
leave up a controversial post from President Donald J. Trump staged a virtual walkout and sent more
internal information to news outlets.

“I think over the last year, there’ve been more leaks than I think all of us would have wanted,” Mark
Zuckerberg, Facebook’s chief executive, said in a meeting with employees in June 2020.

Facebook tried to pre-emptively push back against Ms. Haugen. On Friday, Nick Clegg, Facebook’s
vice president for policy and global affairs, sent employees a 1,500-word memo laying out what the
whistle-blower was likely to say on “60 Minutes” and calling the accusations “misleading.” On
Sunday, Mr. Clegg appeared on CNN to defend the company, saying the platform reflected “the good,
the bad and ugly of humanity” and that it was trying to “mitigate the bad, reduce it and amplify the
good.”

Facebook did not directly address Ms. Haugen late Sunday. Lena Pietsch, a company spokeswoman,
said it was continuing “to make significant improvements to tackle the spread of misinformation and
harmful content. To suggest we encourage bad content and do nothing is just not true.”

In preparation for revealing herself, Ms. Haugen and her team set up a Twitter account for her and a
personal website. On the website, Ms. Haugen was described as “an advocate for public oversight of
social media.”
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A native of Iowa City, Iowa, Ms. Haugen studied electrical and computer engineering at Olin College
and got an M.B.A. from Harvard, the website said. She then worked on algorithms at Google,
Pinterest and Yelp. In June 2019, she joined Facebook. There, she handled democracy and
misinformation issues, as well as working on counterespionage, according to the website.

Ms. Haugen’s complaint to the S.E.C. was based on her document trove and consisted of many cover
letters, seven of which were obtained by The Times. Each letter detailed a different topic — such as
Facebook’s role in spreading misinformation after the 2020 election and the impact its products have
on teenagers’ mental health — and accused the company of making “material misrepresentations and
omissions in statements to investors and prospective investors.”

The letters compared public statements and disclosures to lawmakers made by Mr. Zuckerberg and
other top Facebook executives to the company’s internal research and documents. In one cover letter,
Ms. Haugen said Facebook contributed to election misinformation and the Jan. 6 insurrection at the
U.S. Capitol.

While “Facebook has publicized its work to combat misinformation and violent extremism relating to
the 2020 election and insurrection,” Ms. Haugen’s documents told a different story, one cover letter
read. “In reality, Facebook knew its algorithms and platforms promoted this type of harmful content,
and it failed to deploy internally recommended or lasting countermeasures.”

Mr. Tye said he had been in touch with the S.E.C.’s whistle-blower office and division of
enforcement regarding Facebook. The S.E.C. typically provides protections for corporate tipsters that
shield them from retaliation. The agency also provides awards of 10 percent to 30 percent to whistle-
blowers if their tips lead to successful enforcement actions that yield monetary penalties of more than
$1 million.

The S.E.C. did not respond to a request for comment.

After filing the S.E.C. complaint, Ms. Haugen and her legal team contacted Mr. Blumenthal and Ms.
Blackburn, Mr. Tye said. The lawmakers had held a hearing in May about protecting children online,
focusing on how companies like Facebook were collecting data through apps like Instagram.

In August, Mr. Blumenthal and Ms. Blackburn sent a letter to Mr. Zuckerberg asking Facebook to
disclose its internal research about how its services were affecting children’s mental health. Facebook
responded with a letter that played up its apps’ positive effects on children and deflected questions
about internal research.

But documents from Ms. Haugen showed that Facebook’s researchers have performed many studies
on the effects that its products can have on teenagers, Mr. Blumenthal said in an interview last week.
The company had engaged in “concealment and deception,” he said.

In an interview on Sunday, Mr. Blumenthal said Ms. Haugen “has proved to be credible, courageous
and compelling from her first visit with my office in late summer.”

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Some of Ms. Haugen’s documents have also been distributed to the state attorneys general for
California, Vermont, Tennessee, Massachusetts and Nebraska, Mr. Tye said.

But he said the documents were not shared with the Federal Trade Commission, which has filed an
antitrust suit against Facebook. In a video posted by Whistleblower Aid on Sunday, Ms. Haugen said
she did not believe breaking up Facebook would solve the problems inherent at the company.

“The path forward is about transparency and governance,” she said in the video. “It’s not about
breaking up Facebook.”

Ms. Haugen has also spoken to lawmakers in France and Britain, as well as a member of European
Parliament. This month, she is scheduled to appear before a British parliamentary committee. That
will be followed by stops at Web Summit, a technology conference in Lisbon, and in Brussels to meet
with European policymakers in November, Mr. Tye said.

On Sunday, a GoFundMe page that Whistleblower Aid created for Ms. Haugen also went live. Noting
that Facebook had “limitless resources and an army of lawyers,” the group set a goal of raising
$10,000. Within 30 minutes, 18 donors had given $1,195. Shortly afterward, the fund-raising goal was
increased to $50,000.

Questions:

1. What are the main ethical issues posed in the case study on Meta?
2. What are legitimate expectations and duties of the key stakeholders of Meta? Do you think they
have compatible expectations?
3. Considering the ethical challenges highlighted, what strategies should be implemented to
not only rectify these ethical concerns but also align them with Meta's broader business
objectives? (You may consider how Meta's management employ Porter's shared value
creation framework to address these issues effectively.)