It’s no secret that Facebook has had a lot of problems in recent years when it comes to privacy mishaps, fake news, and a general lack of transparency. Based on the latest profit numbers, it looks like Facebook’s rocky past might finally be catching up to the social network.
Facebook’s stock dropped 8% on Thursday, which equates to about $50 billion from the company’s market cap, according to CNBC. The company’ annual profits fell 16%, its first year-over-year tumble since 2014.
The company’s issues have cost it more than just a drop in stock prices and profits. Amid a historic $5 billion settlement with the Federal Trade Commission (FTC) and many lawmakers calling for it to be broken up, its own users are also questioning the social network.
According to a March 2019 survey from NBC News/Wall Street Journal, 60% of people don’t trust Facebook in protecting their personal information. That’s no surprise given that the list of privacy mishaps keeps growing for the company.
Of course, it all goes back to the Cambridge Analytica scandal in March 2018. The firm used Facebook user data to target political ads, ultimately affecting the data of as many as 90 million users.
The timeline of issues that have happened after Cambridge Analytica is a crowded one, but within the last year alone, Facebook has taken multiple hits to its reputation— and people increasingly see it as the poster child for what can go wrong in social media.
Facebook payouts and fines
As mentioned above, last July, the FTC hit Facebook with a staggering $5 billion fine over privacy violations, the largest fine in the FTC’s history. The settlement was a result of infringements by Facebook of a previous settlement with the FTC in 2012. Among these violations, the FTC alleges that Facebook shared user data with third-party app developers, misrepresented users’ ability to control the use of facial recognition, and used deceptive practices when collecting users’ phone numbers for a security feature, which included advertising purposes.
On the same day of the FTC settlement, Facebook was also hit with a $100 million fine from the U.S. Securities and Exchange Commission (SEC), this time for the misuse of users’ information.
Most recently, Facebook is being forced to shell out money to some of its Illinois users as part of a settlement of a 2015 lawsuit. Illinois has some of the strictest biometric privacy laws, anda 2015 lawsuit alleges that the social network violated these state laws through the use of facial-recognition software in its photo-tagging feature without people’s consent.
Facebook’s ongoing antitrust problems
There’s also been much debate of whether or not Facebook has too much power. An FTC antitrust investigation against Facebook was initially reported last August. The FTC is looking into whether Facebook tried to acquire its social media rivals (i.e., Instagram and WhatsApp) before they could become a threat to its business.
The attorneys general of nearly every state joined New York in a separate antitrust investigation into Facebook. In total, 47 attorneys general are now looking into whether the social media giant “stifled competition” in a way that may have impacted user data and ad prices.
Another investigation by the Department of Justice (DOJ) is focusing on a separate issue from the FTC’s investigation, according to Bloomberg. The DOJ investigation of Facebook was announced in September.
Facebook data breaches
The social network has also had its fair share of data breaches in the past year, which doesn’t bode well for reassuring users that their information is safe on the platform. One of the first breaches occurred in April 2019, when Facebook claims it unintentionally uploaded the email contacts of 1.5 million users as they signed up to the social networking service.
In September, 419 million records of phone numbers from Facebook users worldwide were discovered in an exposed database. Later that same month, a security flaw allowed hackers to take control of as many as 50 million user accounts.
Then in November, the social network revealed that about 100 of its third-party developers had improper access to personal data of several groups’ members, even though the company overhauled its APIs to prevent this exact behavior.
Another data breach happened in December, when more than 267 million Facebook users’ IDs, phone numbers, and names were exposed to an online database that could potentially be used for spam and phishing campaigns.
Leaked documents show that Facebook used user data as a bargaining chipwith its advertising partners and leveraged the data against its competitors. Facebook would alllegedly reward or punish partners, with user data as the main bargaining chip.
Ultimately, Facebook’s stock will likely go back to normal again, but as more of these issues continue to boil to the surface, the company might lose more than just money in the future.
[via: Digital Trends]
[Photo: Kon Karampelas/Unsplash]