Facebook, already the subject of numerous US Senate hearings over its role in the US Capitol Hill riots in January, is now facing greater scrutiny over documents highlighting the fact that it was fully aware of the dangerous effects of its apps.
On October 4, the company's services had one of the worst outages in years. Under criticism from users, activists, lawmakers and more, Facebook is finally feeling the heat from one group that it cares about the most -- investors.
Facebook's shares are already down by 12 percent over the last three weeks, since the day The Wall Street Journal published its widely circulated reports on the social media giant’s internal documents.
The trove of documents unveiled by the WSJ highlighted how the company knew the dangers posed by Facebook and Instagram apps. The company knew that Instagram in particular was driving teenage girls to depression, anxiety and suicidal thoughts. Other internal research documents showed that the company was trying to figure out ways to get kids on both Facebook and Instagram through specially designed apps for them.
Francis Haugen, a former product manager of Facebook's Civic Integrity Team, revealed herself to be the whistleblower behind the leak of 10,000 plus pages of documents that the WSJ was able to access. Haugen accused the company of putting profits before public safety and said that the company was betraying democracy by not controlling the rhetoric of misinformation on its platforms.
The next domino in the line of crises was a six-hour outage of all Facebook services. WhatsApp, Messenger, Instagram and Facebook were all down after a backend routing error sent the platforms offline.
Investors are beginning to slowly jump ship from Facebook, one of the most explosive tech stocks in the market.
While investors are usually the last to move away from a troublesome company, the fear of increased regulation in light of the revelations may be decreasing the appetite for Facebook shares.
Facebook faced a similar outburst of criticism in 2018, when reports of how Cambridge Analytica accessed data of 87 million Facebook users to push targeted ads for Donald Trump before the 2016 Presidential Elections surfaced.
Multiple antitrust probes followed along with requests for breakup of the company, but the matter was finally resolved with a record $5-billion fine from the Federal Trade Commission (FTC).
Investor action is often the catalyst needed for companies to change their tune, and with investors voting with their wallets, Facebook may undergo systemic changes if it wants to remain one of the iconic success stories of Big Tech.
(Edited by : Shoma Bhattacharjee)
First Published: IST