As the stock markets opened yesterday, 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 the tech giant 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 reportedly 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”.