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Zuckerberg May Have Known About FBs Suspicious Privacy Practices
Social media giant Facebook discovered emails that reveal that CEO Mark Zuckerberg knew about problematic privacy practices at the company, people familiar with the matter told the Wall Street Journal (WSJ). The executives uncovered the emails while responding to an investigation by the Federal Trade Commission (FTC), though they concluded that it would be harmful if the messages became public.
The share price of FB, traded on NASDAQ exchange, fell over 2% after the news, closing at the end of the session at 1.72%.
Zuckerberg & Top Executives Didn’t Really Care
The Menlo Park-based company has been investigating whether it violated the terms of its 2012 consent decree with the FTC, which revolves around privacy issues. While looking into the emails sent at that time, Facebook found out that Zuckerberg and some other top executives didn’t consider the FTC order a top priority.
The potential impact of the emails pushed the company to obtain a quick settlement of the FTC investigation, the WSJ reports, citing one insider.
However, we don’t know what email messages the federal agency has requested and how many of them point to Zuckerberg. Also, it is not clear whether any of the internal emails demonstrate the company’s violation of the 2012 agreement.
Where it All Started
The FTC began its investigation early in 2018 after reports that private data of tens of millions of FB users somehow reached Cambridge Analytica, a UK-based data firms that worked for US President Donald Trump’s campaign in 2016 and leave.eu during the Brexit vote. The FTC is exploring whether the data leak violated the 2012 consent decree in which the social media company agreed to improve the protection of user privacy. Since the Cambridge Analytica scandal, other privacy failures showed up, which put pressure on Facebook.
Zuckerberg’s company has been keen to reach an agreement with the FTC and move next. In April, the company said it expected to pay around $5 billion as part of an agreement with the agency. A Facebook spokesperson said on Tuesday:
We have fully cooperated with the FTC’s investigation to date and provided tens of thousands of documents, emails and files. We are continuing to work with them and hope to bring this matter to an appropriate resolution.
After the WSJ article came out on Wednesday, the company stated:
At no point did Mark or any other Facebook employee knowingly violate the company’s obligations under the FTC consent order nor do any emails exist that indicate they did.
Emails Hint That Zuckerberg Knew About Privacy Problems
Some emails that reached the FTC show that Facebook was pondering on how it should deal with privacy based on the consent order. According to an email exchange from April 2012, Zuckerberg asked employees more details about an app that allegedly have created a database that stored information on tens of millions of users. A developer could openly display that user data to others on its own website, even if some of those users had switched on the privacy settings on Facebook, a person told the WSJ.
The CEO asked whether such massive data collection was achievable, and if the company should try anything to prevent developers from displaying that user information. An employee responded by saying it was doable, and many developers actually do the same, though it was somewhat difficult. While Facebook suspended that specific app, it didn’t address the problem from a broader perspective. Zuckerberg and others didn’t investigate how many other such apps might stockpile user data.
At that time, the company’s top executives were more concerned about expanding the user base and adding advertisers, leaving less room for data-use rules.
The FTC has been exploring the email exchange as part of the investigation, the insider said.
On a side note, Facebook is about to announce its own cryptocurrency called GlobalCoin, which will require potential nodes to pay $1 million to become part of the Foundation that validates the blockchain blocks.
Anatol has been writing for our news site for a year and is the newest member of our team. While he’s new to us, he’s certainly not new to trading with over 10 years’ experience being a professional financial journalist and working in the markets.
