Facebook getting hammered by lawmakers, consumers and even investors
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Mark Zuckerberg, Facebook CEO and Chairman of the Board testifies before the House Financial Services Committee in Washington on October 23, 2019.
Erin Scott | Reuters
FacebookIs in the eye and the fury of the storm
Both sides of the aisle have reacted furiously to leaked documents that revealed Facebook’s long-standing knowledge, based on its own research, of the grave harm it can cause.
Customers are insane after being cut off from company services for six hours Monday. This is the longest interruption in thirteen years.
The stock has dropped 12% in three weeks while the Nasdaq is down 4.5%. Investors who tend to be the last ones to leave are talking with their wallets.
This outrage is similar to the Facebook scandal of March 2018 when Cambridge Analytica was accused of improperly accessing data from 87 million Facebook users and using it to create targeted ads. Donald Trump2016 presidential election.
Sign erected by protestors at Cambridge Analytica’s offices in central London.
PA Images | PA Images | Getty Images
The scandal caused a lot of controversy on Facebook and attracted a lot of attention. its lobbying efforts calls for a breakupMultiple antitrust investigations and, ultimately, a record were made about the company. $5 billion fineFederal Trade Commission.
Facebook’s business continued to thrive and didn’t alter much. Even though the 2020 presidential election was imminent, misinformation continued to flourish. Misinformation has continued to flourish throughout the duration of the Covid-19 pandemic anti-vaxxersAnti-maskers and anti-maskers are rampant, with Facebook’s algorithm often spreading the most bizarre conspiracy theories.
The Wall Street Journal’s latest report reveals that Facebook is well aware of the addictive nature its products and makes use of that information to earn even more off its users. Facebook is well aware that its Instagram service could be harmful to teenagers’ health.
Facebook looks exactly the same as Facebook Big Tobacco, pushing a product that they know is harmful to the health of young people, pushing it to them early, all so Facebook can make money,” Sen. Ed Markey, D-Mass., said in a hearing last week held by the Senate Commerce subcommittee on consumer protection.
Antigone Davis (global head for safety at Facebook) was the witness. The Journal asked her to speak on a variety of topics. “The Facebook Files,”This was done based upon internal documents that were provided by whistleblowers.
This whistleblower was speaking out ahead of an appearance on CBS’ 60 Minutes as Frances Haugen. She is a former product manager at Facebook. Haugen had made copies before leaving Facebook in May. at least 209 slides of internal company research
Facebook was forced to stop its plans after the public protest sparked in response to Journal’s series. develop Instagram KidsA version for children aged 12 or younger is called “The app”.
Facebook isn’t committing to ending the Instagram Kids initiative permanently. In an interview with his Instagram followers Adam Mosseri stated that he would let his children use Instagram if the product was customized for them.
Hillside has a new tone
While it is almost common for Capitol Hill to hold Facebook hearings, these events were quite different from the ones that occurred in the past.
Haugen, who appeared on “60 Minutes”, testified Tuesday before the same subcommittee as Davis. Haugen was harsh in her critique of her ex-employer, telling legislators that her company always prioritizes profit over safety and user health. It also steers users to high-engagement posts which are known to be dangerous.
Frances Haugen, former Facebook employee and whistleblower, is testifying before the Senate Committee on Commerce, Science, and Transportation, Capitol Hill, on Oct 5, 2021 in Washington, DC.
Drew Angerer | AFP | Getty Images
Senators called out Facebook CEO Mark ZuckerbergFor failing to answer questions or doing little to speak to the public about the Journal’s reports since its inception. Subcommittee chair Sen. Richard Blumenthal (D-Conn), stated that it was too early to subpoena Zuckerberg and suggested that he appear before Congress in his own right.
Blumenthal stated that “He has the public responsibility to answer those questions.”
Zuckerberg finally spoke out Tuesday evening. a Facebook postWe reject claims by Haugen or the Journal.
Zuckerberg stated that the core of these allegations is the idea that profit has been prioritized over safety and wellbeing. It’s simply not true.
He said that it was absurd to argue that Facebook encourages people to post content that causes them to be angry.
He wrote, “We make our money through ads and advertisers repeatedly tell us that they don’t want ads near harmful or offensive content.”
Facebook went through yet another round of stress on Monday. worst service outage since 2008
The company suffered six hour-long outage due to configuration changes made on backbone routers.
Facebook’s work tools also went offline. company employees and contractors were unable to get onThe system. CNBC was told by one employee that Discord servers were set up to allow workers to connect with each other because Facebook’s internal communications tools had gone down. CNBC was told by an Instagram employee that certain employees believed the outage to be karma in light of the whistleblower case.
According to Morningstar, Facebook could have lost $110 to $120 million of ad revenue due to advertisers not being able to reach customers for most of their workday. This would be less than 0.4% revenue compared to the fourth quarter of last year.
Stocks fell by almost 5% due to investor pressure on Monday. This is in addition to recent declines. Even though the stock rebounded 2% Tuesday, it is still 12% lower than where it traded on Sept. 13 when the Journal began publishing its series.
Facebook might rebound just like in the past. It could continue to climb. Investors have more reasons to doubt the viability of the business model every time there is a crisis.
CNBC’s Jim Cramer said Monday that “We have fought negative headline after negative headline” to members of his investment club. We find this story to be different. The culture needs to change at Facebook, and if they cannot fix themselves then we would expect to see even more calls, louder calls, for increased regulation on the platform, and regulation is never good for business.”
Facebook’s spokesperson did not reply to requests for comment.
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