Facebook, Inc. (NASDAQ: FB) was set to
open down 3 percent Thursday after the U.K. Parliament released a cache of
seized emails late
Wednesday.
What Happened
Correspondence between CEO Mark Zuckerberg and fellow executives
revealed intent to stifle competition and to monetize user data via various avenues. They also show that Facebook:
-
NFLX) and
Airbnb, while withholding access to certain services from some strategic competitors, like Twitter Inc
(NASDAQ: TWTR);
- Deeply involved Zuckerberg in business decisions throughout its growth; and
- Years back, considered charging developers to access data.
Zuckerberg defended the emails as a record of brainstorming rather than strategizing.
“Like any organization, we had a lot of internal discussion and people raised different ideas,” he said in a Wednesday Facebook
post. “Ultimately, we decided on a model where we continued to provide the developer platform for free and developers could choose
to buy ads if they wanted. This model has worked well.”
He added that many of the proposals were raised to address the proliferation abusive apps in 2014 and 2015.
Why It’s Important
The information could exacerbate Facebook’s regulatory struggles. Both the U.S. and Europe have scrutinized the firm for its
policies around user privacy, competition and control over platform access.
“[The documents] not only show evidence of wrongdoing with regards to user privacy, but they demonstrate substantial
anticompetitive practices in the way they leveraged user data,” Ashkan Soltani, a former chief technologist for the Federal Trade
Commission, told the WSJ.
The FTC has been investigating Facebook for potential violation of a user consent agreement.
How U.K. regulators and the FTC intend to react to this leak is yet unknown.
Related Links:
Height
Capital Markets: Fed's Broader Facebook Data Privacy Investigation Unlikely To Create New Material Risk
Analysis:
The Facebook Data Controversy, And Why Wall Street Could Take It Harder Than Washington
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