Facebook shares has taken a sharp fall one day after documents
incriminating the tech giant were leaked. As the stock markets opened
today, the company's shares opened around 2.5 per cent down, wiping
about $9.5billion out of the company's $379billion value.
This
comes one day after a document leak which shows that Facebook used its
platform to cripple rivals, aggressively pursued competitors, and
leverage developers for advertising money, setting up conflicts with
regulators and politicians around the globe. The leaked documents
revealed that: Facebook planned to grant companies access to user data
based on how much advertising they bought, and threatened to cut off
access for firms paying under a certain amount.Facebook programmed its
android app to see users call and text records in which it admitted was a
"pretty high-risk thing to do from a PR perspective".Mr Zuckerberg said
he was "sceptical" that apps with access Facebook users' data would
pass data on, as then happened in the Cambridge Analytica
scandal. Facebook used Onavo app it acquired to spy on users' phone
usage, apparently without their knowledge, to identify competitors such
as Whatsapp to buy out.Following the document leak, stock investment
firm Stiefel downgraded Facebook's shares from "buy" to "hold" ahead of
markets opening in New York, saying the company has made "too many
adversaries" for its business to thrive. Stiefel told CNBC:Facebook’s
management team has created too many adversaries -- politicians/
regulators, tech leaders, consumers, and employees -- to not experience
long-term negative ramifications on its business.One key issue is how
Facebook took "aggressive positions" against rivals and denied key
competitors such as Vine access to its data, which shut down shortly
after. Facebook CEO Mark Zuckerberg personally approved a decision to
block Twitter's app Vine from accessing users' Facebook friends
lists.The papers leaked by British MP Damian Collins also showed that
Facebook signed deals to give companies such as Netflix and AirBnB
special access to user dater and spied on Android users' calls and
texts.Facebook strongly denied ever selling user data and insisted it
only granted these companies "short term extensions" to preserve user
experience.In the midst of the fallout, Zuckerberg was forced to defend
himself on Wednesday night, saying in a lengthy Facebook post that the
company "never sold anyone's data".The EU is aggressively cracking down
on tech monopolies and recently fined Google $5billion for breaching its
competition laws. While the EU has so far been silent on the Facebook
leak, regulators are certain to be aware of it and will likely
investigate whether the social media giant broke any laws, Daily Mail
reports. Politicians from eight world governments investigating the
spread of fake news, led by British MP Damian Collins who leaked the
papers, will also pile pressure on Facebook to disclose exactly how it
monetises user data.
Following
the document leak, on Wednesday night, a former Facebook staff
described a "toxic and hostile" atmosphere at the company. One former
senior employee told Buzzfeed News that workers are desperate for a
change of leadership. Another said staff fear being scolded by furious
bosses who are "spouting full-blown anti-media rhetoric, saying that the
press is ganging up on Facebook."
