Case Reports: 2025 Vol: 31 Issue: 1S
Thanapong Jaisan, Chiang Mai University
Citation Information: Jaisan, T. (2025). Legal and ethical challenges in the digital age: Data privacy, AI, and cyber security. Journal of the International Academy for Case Studies, 31(S1), 1-3.
The rapid advancement of digital technologies has raised significant legal and ethical concerns, particularly in data privacy, artificial intelligence (AI), and cybersecurity. This case report examines a real-world instance of a major data privacy breach and the ethical implications of AI decision-making. It explores the legal frameworks governing digital security, the ethical dilemmas faced by organizations, and the role of regulatory bodies in enforcing compliance. By analyzing this case, the report highlights the need for stronger policies and ethical guidelines to protect individuals and organizations in the digital era.
Data Privacy, Artificial Intelligence, Cybersecurity, Digital Ethics, Legal Compliance, Cyber Laws, Ethical AI.
The digital revolution has transformed how businesses and governments operate, leading to increased dependence on data-driven technologies (Federal Trade Commission, 2019). However, this reliance comes with significant risks, including cyber threats, ethical concerns in AI deployment, and challenges in data privacy protection (California Consumer Privacy Act, 2020). Laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) attempt to address these issues, but enforcement remains a challenge. This case report examines a major data breach and the ethical implications of AI in decision-making to shed light on legal and ethical gaps in the digital space (Wachter et al., 2017).
The Facebook-Cambridge Analytica Data Scandal
One of the most notable cases in digital privacy violations was the Facebook-Cambridge Analytica data scandal in 2018. Cambridge Analytica, a British political consulting firm, improperly harvested data from over 87 million Facebook users without their explicit consent (Zuboff, 2023). The firm used AI-driven psychological profiling techniques to influence voter behavior in political campaigns, raising serious ethical and legal concerns.
Legal Issues
• Violation of Data Protection Laws: Cambridge Analytica’s actions violated data protection laws, particularly GDPR, which mandates explicit user consent before collecting personal data.
• Facebook’s Accountability: Although Facebook did not directly collect the data, it failed to implement strong cybersecurity measures to prevent unauthorized third-party access.
• Regulatory Actions: In response, Facebook was fined $5 billion by the U.S. Federal Trade Commission (FTC) for privacy violations, and Cambridge Analytica faced investigations leading to its shutdown.
Ethical Issues
• Informed Consent: Users were unaware their data was being used for political profiling, violating the ethical principle of autonomy.
• Manipulation and Misinformation: AI-powered psychological profiling led to targeted misinformation campaigns, raising concerns about fairness and transparency in digital governance.
• Corporate Responsibility: The case highlighted the moral duty of tech companies to ensure ethical use of AI and user data.
Bias and Discrimination in AI
AI systems, particularly in hiring, banking, and law enforcement, have demonstrated bias due to flawed training data. For instance, AI-driven hiring tools used by Amazon were found to discriminate against female candidates, leading to ethical concerns about fairness in AI decision-making (Amazon AI Bias Report, 2018).
Cybersecurity and Data Breaches
With increasing cyber threats, companies struggle to secure user data. The 2017 Equifax data breach, exposing sensitive information of 147 million users, emphasized the need for stronger cybersecurity laws and corporate responsibility (Pasquale, 2015).
Government Surveillance and Digital Rights
Governments worldwide use AI for surveillance, often infringing on digital privacy rights (IEEE, 2019). The Chinese social credit system, which monitors citizens’ behaviors using AI and big data, raises ethical concerns about surveillance overreach and individual freedoms (Cadwalla et al., 2018).
General Data Protection Regulation (GDPR)
GDPR enforces strict guidelines for data protection and user consent in the European Union. It requires organizations to (Equifax Data Breach Report, 2017):
• Obtain explicit consent before collecting personal data.
• Provide users with control over their data.
• Implement strong cyber security measures to prevent breaches.
California Consumer Privacy Act (CCPA)
CCPA grants U.S. consumers rights over their personal data, including the right to (Regulation, 2018):
• Know what data is being collected.
• Opt-out of data sharing.
• Request deletion of personal data.
Challenges in Enforcement
Despite strong laws, enforcement remains challenging due to:
• Jurisdictional limitations in global cyberspace.
• Loopholes in compliance mechanisms.
• Evolving nature of cyber threats and AI advancements.
• Governments must update existing laws to address AI ethics and emerging cyber threats.
• Global cooperation is needed to create uniform digital laws.
• Companies should adopt transparent AI models to prevent bias.
• Ethical AI frameworks, such as the IEEE Ethically Aligned Design, should be implemented.
• Organizations must enhance cybersecurity practices and be held accountable for data breaches.
• Users should be educated about digital privacy rights and data protection measures.
In conclusion, while legal frameworks such as GDPR and CCPA have established privacy regulations, challenges remain in enforcing ethical standards in AI and cybersecurity. The Facebook-Cambridge Analytica case highlights the risks of unregulated data use, while increasing AI adoption necessitates ethical guidelines to prevent discrimination and bias. Stronger regulatory mechanisms, corporate responsibility, and digital literacy are crucial in addressing legal and ethical challenges in the digital era.
Amazon AI Bias Report (2018). AI Discrimination in Hiring Systems. The New York Times.
Cadwalladr, C., & Graham-Harrison, E. (2018). The Cambridge analytica files. The Guardian, 21(2), 6-7.
California Consumer Privacy Act (CCPA) (2020). Consumer Data Protection Laws.
Equifax Data Breach Report (2017). Cybersecurity Failures in Data Protection. Forbes.
Federal Trade Commission (2019). Facebook Settles Privacy Violations for $5 Billion.
IEEE (2019). Ethically Aligned Design: A Vision for Prioritizing Human Well-being with Autonomous and Intelligent Systems. IEEE Standards Association.
Pasquale, F. (2015). The black box society: The secret algorithms that control money and information. Harvard University Press.
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Regulation, P. (2018). General data protection regulation. Intouch, 25, 1-5.
Wachter, S., Mittelstadt, B., & Floridi, L. (2017). Why a right to explanation of automated decision-making does not exist in the general data protection regulation. International data privacy law, 7(2), 76-99.
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Zuboff, S. (2023). The age of surveillance capitalism. In Social theory re-wired (pp. 203-213). Routledge.
Received: 02-Feb-2025, Manuscript No. jiacs-25-15819; Editor assigned: 03-Feb-2025, PreQC No. jiacs-25-15819(PQ); Reviewed: 17-Feb-2025, QC No. jiacs-25-15819; Revised: 21-Feb-2025, Manuscript No. jiacs-25-15819(R); Published: 28-Feb-2025