Facebook Inc. is putting tighter controls on data flowing through its giant social network in response to the worst privacy crisis in its history. Rather than hurt the company, this will ultimately give Facebook and rival Google more power over a digital advertising market they already dominate, industry executives and analysts say.
The crackdown started last week after revelations a consulting firm that worked on Donald Trump’s presidential campaign improperly accessed information on millions of Facebook users. The first victims were data brokers like Acxiom Corp. and Oracle Corp.’s Data Cloud that sell information marketers use to target ads on the world’s largest social network. Facebook is scrapping the targeting tool and will stop sharing anonymous information the brokers use to measure ad performance.
The company said this “will help improve people’s privacy on Facebook.” The shares have slumped on concern tighter data policies like this will make Facebook ads less valuable, denting revenue growth. But some in the advertising industry think the changes will push marketers further into Facebook’s arms, sending more spending directly to the company.
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