According to the NY Times, Facebook has allegedly granted other companies indiscriminate access to its users' data. If that's the case, the social risks big
The NY Times investigation, which revealed how Facebook has been sharing users' private information with outside companies for several years without having the explicit consent to do so, could cost Mark Zuckerberg's company dearly.
According to Matthew Schettenhelm, an analyst at Bloomberg Intelligence, the behaviors that emerged from the investigation are more than enough to be considered a violation of the 2011 privacy agreement between Facebook and the Federal Trade Commission. And that could translate into a billion-dollar fine. "The political pressure on the FTC is significant: not all of the allegations against Facebook are violations, but there's a real possibility that some of them are," Schettenhelm said in an interview, adding that "it doesn't take many violations of the consent agreement for the FTC to make a significant fine, if you multiply the violations by the number of users Facebook has."
What the agreement between Facebook and the government trade commission provides
The 2011 agreement between the Federal Trade Commission and Facebook stipulates that the latter cannot share its users' private data without obtaining specific and explicit consent to do so. According to a report by the New York Times, however, for several years Facebook has entered into business agreements with numerous companies that have allowed those companies, through their Facebook apps, to access personal data of friends of users who had installed the app and in some cases even read private Messenger chats. Facebook responded that this is not a violation of its agreement with the FTC because all the companies it has made deals with accept and adopt the social's privacy policy on their apps.
What does Facebook risk?
But what could happen to Facebook in case of a maxi privacy fine? Not much, if you look at the reactions on the Wall Street Stock Exchange: as many as 41 financial market analysis companies continue to recommend buying Facebook stock, compared to only 3 that recommend selling it. This is because, even if in the end the fine should really arrive, it would not be able to harm Facebook too much. According to Bian Wieser, analyst at Pivotal Research Group (one of the few companies that today advises to sell Facebook stock), "it's not a question of whether they will be fined, but how much the fine will amount to and what the consequences will be". According to Michael Pachter of Wedbush Securities (who, on the contrary, advises to keep the stock) "Even if Facebook were to receive a fine of 5 billion dollars, it would take the hit".
In the meantime, as often happens when news about serious privacy violations on Facebook spreads, a small percentage of users is abandoning the Zuckerberg group's social networks: Facebook, Instagram, WhatsApp and their respective instant messaging services.