It’s Facebook. Again.
It seems as though Facebook hasn’t been able to stay out of the news for a single month through 2018 and into 2019. From psychological experiments to data breaches, Facebook is constantly being accused of a casual disregard for its users’ privacy. And that’s a problem in a world in which nearly everyone uses Facebook and shares extremely intimate details about themselves on it. Presently, UK lawmakers are accusing Facebook of intentionally violating anti-competition and data privacy laws. These lawmakers are calling upon Facebook CEO Mark Zuckerberg to answer their questions.
Britain’s Parliament Demands Answers
It’s always been known that Facebook was sloppy with its data. What has been questioned is how much was intentional. As a company initially founded as a sort of yearbook for college students, Facebook has been notoriously lax about security and data. Many data breaches and privacy leaks have been claimed to be accidental: the results of a complex, convoluted platform that has changed tremendously over time. The Cambridge Analytica scandal was claimed to be the results of a seller reselling information, rather than Facebook intentionally selling data.
However, in a review of internal Facebook emails and messages, a committee of UK lawmakers believe they have found evidence of intentional data misuse. The UK committee alleges that not only did Facebook intentionally disregard security settings in order to get the data they needed, but they restricted this data to developers they wanted to prosper, while withholding it from developers they wanted to go out of business. If these allegations are true, it could mean that Facebook is in for some significant penalties.
In addition to privacy laws, the UK committee has further come to the conclusion that Facebook was aware of the Russian intrusion into politics at the time that it happened. In the past, Facebook has claimed that no one was truly aware of the threat of Russian “fake news,” and consequently Facebook as a platform wasn’t looking for it. The UK committee claims that they’ve found messages that prove that Facebook was more than aware of Russian influence at the time, and this influence may have impacted things like Brexit.
By wielding its influence in its own self-interest, the UK committee has stated that Facebook has acted as “digital gangsters.” They have violated privacy laws intentionally, attempted to run competition out of business, and made it possible for foreign powers to interfere with the perception of truth—at least, that’s what is claimed. While Mark Zuckerberg was asked to appear before the committee, he declined.
The Future of Facebook
Unfortunately, with as much data as is being released today, many consumers are already living in a post-privacy world. Many have lost control of their private data already. Once data is leaked, it’s out there forever. Nevertheless, the UK committee did have some suggestions, moving forward:
- Social media platforms will need to be regularly audited, in terms of their advertising and their security.
- Social media platforms will need to be investigated regarding anti-competitive business strategies.
- Social media platforms will need to be researched regarding potential voter manipulation.
- Social media platforms will need to be ethical entities that operate to an ethical code.
In a world where social media platforms are rapidly gaining power, regulators are considering taking action.
Facebook’s Spat with the FTC Continues
The UK isn’t the only entity that’s still dealing with Facebook. Facebook is still in negotiations with the FTC regarding a multi-billion dollar fine. Yet, Facebook’s annual income is over $20 billion, which means that even a multi-billion dollar fine could mean nothing to the company. Facebook’s ad revenue also continues to grow.
It’s important to note that much of Facebook’s revenue comes directly from user data. Facebook sells ads, and these ads are targeted based on consumer information. This is not just gender and age, but also detailed information such as whether a consumer has a good friend with a birthday coming up, or whether they are married to a spouse who likes a certain type of music. Thus, privacy issues are anchored into the very core of what generates revenue for the business.
While Facebook has been in the news quite a bit lately, it hasn’t damaged the platform as much as one would expect. Facebook continues to post record profits and remains unconcerned about its active users. And while its stock may currently be on a slide, it’s actually recovered significantly since the last scandal. All of this means that a risk-tolerant investor may still find Facebook a solid company—though others may have problems with its ethics.
Regards,
Ethan Warrick
Editor
Wealth Authority
