Facebook is in news albeit for all the wrong reasons.
Facebook, Inc. an American social media conglomerate, rose in popularity and became an indispensable part of people’s lives all across the globe.
Founded by Mark Zuckerberg, along with his Harvard buddies and roommates, originally as TheFacebook.com, lately seems to be facing its demons.
Considered as one of the Big Five technology companies, along with Microsoft, Amazon, Apple, and Google, Facebook is touted as one of the world’s most valuable companies.
On February 1, 2012, Facebook filed for an initial public offering, however, its debut was as marked in controversy and drama, as the company finds itself facing today.
Regulators from Wall Street’s Financial Industry Regulatory Authority announced that they had begun to investigate, if the banks underwriting Facebook, had improperly shared information only with select clients, rather than the general public, it initiated the investigation on May 22, 2012.
This led to ‘anger’ among some investors and an immediate filing of several lawsuits, and Bloomberg estimated that the retail investors may have lost approximately $630 million on stocks of Facebook since its debut.
Facebook, has since its inception acquired and merged with multiple companies – Instagram (2012), Onavo (2013) WhatsApp (2014), Oculus VR (2014), Beat games (2019) Jio Platforms, Reliance Industries (2020) Giphy (2020)
Controversies and Lobbying accusation’s
- 2003 – 2009 – Complex and marked history and Founder’s Tussle – Not many people are familiar with Eduardo Saverin, who as a junior at Harvard was approached by Mark Zuckerberg to be his business partner, Mark Zuckerberg needed $15000 as capital for the servers, and to run the site, in exchange he offered 30% of the company. However, over some time Saverin’s stakes were reduced to 10%, and his equity further diluted. Saverin sued Facebook and the matter was finally settled in court where he was given 5% ($2.5 billion today)
- 2003 – 2018 – Winklevoss Twins Controversy – In 2003 Winklevoss twins approached Mark with their new project HarvardConnection, a social networking site for Harvard students. They claimed that Zuckerberg entered into a verbal contract with the promise to help build the site in return for equity. Two days after Facebook was launched in February 2004, Winklevoss Brothers got to know about the website, a cease and desist letter was sent to Mark by the Twin brothers. Although Harvard Connection was launched later as ConnectU, it failed to make a mark, and again in 2018, ConnectU filed another lawsuit to rescind the settlement.
- 2012 – FIRA announced investigation of irregularities in underwriting Facebook stocks by banks
- 2016 – 2020 – Facebook Algorithm and Continued Censorship, Facebook ran into trouble with issues in content development and the context of the Facebook algorithm. It was accused of limiting and wrapping the worldview as this personalization i.e. the algorithm, cuts out everything that it believes the users will not like.
- 2016 – 2020 – Effect on the election & Fake News – One of the major controversies to hit Facebook, was when it was accused of failing to clamp down fake news, and the way the algorithm made use of the user’s information that shaped the outcome of the presidential election. Mark Zuckerberg who earlier shrugged of all responsibility later came out with an apologetic post.
- 2016 – 2020 – Data Breach, Donald Trump, The Cambridge Analytica, and Russian Intrusion – millions of users’ data were breached by British voter-profiling company, Cambridge Analytica, which in 2016 campaigned for U.S President Donald Trump in the U.S Presidential Elections. The British firm used data obtained from Facebook to target likely supporters of Donald Trump during the election campaign. Initially, the figure of those affected stood at 50 million users, however, the latest reports suggest that the figures stand at 80 million users.
- 2019 – Federal Trade Commission started an antitrust investigation
- 2019 – 2020 – data leaks of about 700 million users, personal information was leaked on the Vietnamese Elasticssearch server and from multiple social media platforms, and was available for download with different book firms.
- 2020 – Facebook is now being accused of tracking the location of all its users even if the location services are switched off. The information was given by Facebook itself to US senators. However, it argued that the location of the users has a lot of benefits as it helps show advertisements according to the location along with many other inputs.
- 2020 – Facebook sparked controversy in India, as it failed to remove hate – speech posted by members allegedly linked to the Bharatiya Janata Party
Facebook continues to lose trust and credibility with its unapologetic transgressions putting millions of its users’ personal information and data at risk even as it tries to clean up its act by promising to introduce stricter protocols and measures.