Facebook Shares Tumble After Report Zuckerberg Knew Of “Questionable” Privacy Practices

Shares of Facebook tumbled on Wednesday after emails emerged which appear to show Facebook CEO Mark Zuckerberg’s knowledge of questionable privacy practices at the company, according to the Wall Street Journal, citing people familiar with the matter. 

Within the company, the unearthing of the emails in the process of responding to a continuing federal privacy investigation has raised concerns that they would be harmful to Facebook—at least from a public-relations standpoint—if they were to become public, one of the people said.

The potential impact of the internal emails has been a factor in the tech giant’s desire to reach a speedy settlement of the investigation by the Federal Trade Commission, one of the people said. Facebook is operating under a 2012 consent decree with the agency related to privacy, and the emails sent around that time suggest that Mr. Zuckerberg and other senior executives didn’t make compliance with the FTC order a priority, the people said. –Wall Street Journal

It is unknown exactly which emails the FTC has requested, or how many relate to Zuckerberg. The FTC launched its investigation in 2018 in the wake of the company’s massive ‘data harvesting’ scandal brought to light by the Cambridge Analytica controversy. In particular, the FTC wants to know if Facebook’s data privacy lapses violated a 2012 consent decree the company agreed to

In one email exchange from April 2012 that has caught regulators’ attention, according to a person familiar with the matter, Mr. Zuckerberg asked employees about an app that claimed to have built a database stocked with information about tens of millions of Facebook users. The developer had the ability to display that user information to others on its own site, regardless of those users’ privacy settings on Facebook, the person said.

Mr. Zuckerberg wanted to know if such extensive data collection was possible and if Facebook should do anything to stop developers from displaying that data, the person said.

Another employee responded to Mr. Zuckerberg’s question, saying it was possible and many developers do the same thing but adding it was a complicated issue, the person said. –Wall Street Journal

And as the Journal notes, that email exchanged happened after the FTC’s consent decree had been announced, but prior to it taking effect. “If it had been in effect at the time, the stockpiling of such user data would potentially have violated it. Mr. Zuckerberg’s message seemed to indicate he was aware of that, according to the person who was familiar with the exchange,” per the report. 

In April, the company said it anticipates paying up to $5 billion to settle the case. 

On Tuesday, Facebook said in a statement: “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.” 

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Author: Tyler Durden