Steve Dempsey: ‘Teflon Facebook still cashing in’

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Steve Dempsey: ‘Teflon Facebook still cashing in’


Sheryl Sandberg appeared at the billionaire's love-in at Davos, telling all who'd listen that the social network needed to earn back users' trust following the seemingly endless scandals in 2018. Photo: Bloomberg
Sheryl Sandberg appeared at the billionaire’s love-in at Davos, telling all who’d listen that the social network needed to earn back users’ trust following the seemingly endless scandals in 2018. Photo: Bloomberg

Facebook has been on a serious charm offensive lately. It all started with Mark Zuckerberg’s opinion piece in the Wall Street Journal. Facebook’s CEO was at pains to tell us he doesn’t sell users’ data. “Selling people’s information to advertisers would be counter to our business interests, because it would reduce the unique value of our service to advertisers. We have a strong incentive to protect people’s information from being accessed by anyone else.”

Of course this is nit-picking. Facebook doesn’t sell data, but it does let advertisers target users based on data.

Next up was Sheryl Sandberg who appeared at the billionaire’s love-in at Davos, telling all who’d listen that the social network needed to earn back users’ trust following the seemingly endless scandals in 2018. “We did not anticipate all of the risks from connecting so many people,” she said.

Nick Clegg – now Facebook’s global head of public relations, remember – followed Sandberg’s understatement with a speech in Brussels on Facebook’s plans to protect electoral integrity. “I’m in no doubt that we have a lot of work to do to demonstrate that Facebook’s tools can have a positive contribution to the quality of our democracy,” he said.

Deploying these heavy hitters may just be part of Facebook’s ongoing scraping and apologising.

But it felt like the company knew there was a storm brewing and it wanted to come out of the blocks in a positive light.

Turns out there wasn’t one storm coming for Facebook. There were a few.

A day after Nick Clegg’s announcement, the European Union told a host of US tech companies (including Facebook) they needed to up their game to prevent the spread of misinformation before the EU elections in May.

The European Commission Security Chief Julian King said the reporting provided by Facebook and other tech companies as part of the EU’s code of practice against disinformation was “patchy, opaque and self-selecting”.

Meanwhile, Facebook caught further flak when it emerged it was planning to merge the back end of its messaging services – WhatsApp, Instagram and Facebook Messenger. They’ll remain standalone apps, but the backend infrastructure will be unified. Antitrust and privacy campaigners in the US are up in arms at the mooted merged code-base. And even our own Data Protection Commissioner promised to keep a keen eye on the plan, as it would involve the sharing of personal data between different Facebook companies.

Here’s what a statement said: “Previous proposals to share data between Facebook companies have given rise to significant data-protection concerns and the Irish DPC will be seeking early assurances that all such concerns will be fully taken into account by Facebook in further developing this proposal. It must be emphasised that ultimately the proposed integration can only occur in the EU if it is capable of meeting all of the requirements of the GDPR.”

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Then there’s a report from a former classmate of Zuckerberg, which estimates over half of Facebook’s users may be fake. Facebook of course, strenuously denied it, but last year it was finding and removing around 7.7 million false accounts a day.

And earlier this week, the technology website Techcrunch revealed that Facebook had been paying people in return for full access to their phone activity. Turns out, the social network has been paying users $20 a month to install an app that lets Facebook access all their data since 2016. The problem here is that this activity puts Facebook on a collision course with another Silicon Valley titan, Apple. Facebook was using a system designed for the internal distribution of apps within an organisation, to allow members of the public to flog their privacy. In response, Apple has shut down Facebook’s ability to distribute apps internally.

But regardless of the heavy-handed PR push, and despite the latest mis-steps, Facebook’s Teflon business model is continuing to generate record revenues. Fourth quarter results for 2018 saw revenues of $16.9bn (€14.7bn), a year-over-year growth rate of 30pc. There were some rumblings of discontent from some advertisers last year. Most notably, Mat Baxter, CEO of Initiative said he was advising clients to stay off the platform.

Most advertisers, though, are happy to stick with the social network. And why not? If it ain’t broke don’t fix it.

But while advertisers may think nothing’s broken here, regulators on either sides of the Atlantic may disagree.

Sunday Indo Business

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