Confirmation of a US Government Probe Pushes Facebook's Market Loss To $90 Billion (qz.com)

The US Federal Trade Commission has confirmed that it is investigating Facebook over its privacy practices, following recent revelations that data firm Cambridge Analytica harvested and exploited tens of millions of users' data without their permission. From a report: Facebook's stock renewed its downward slide, bringing the company's total loss of market value to around $90 billion since the scandal broke 10 days ago. "The FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook. Today, the FTC is confirming that it has an open non-public investigation into these practices," said Tom Pahl, acting director of the FTC's Bureau of Consumer Protection, in a statement.

Comments

No

[Anonymous Coward]

Facebook's made-up "market value" went down. *POTENTIAL* money was lost. No actual money was lost. RIAA math at work again.

Re:No

[easyTree]

Have FB suddenly changed business model? If not, why the sudden concern?

Re:No

[Anonymous Coward]

Why is this modded down? That's the way fantasy football, er, the derivatives markets work. And besides, what is there to 'investigate'? Aside from the financial fraud of 'market valuation'?(A DeLorean with a Briggs & Stratton engine) They should be studying the gullibility of stupid people that believe everything they see and hear on Facebook. But even all that has been well documented.

*sigh* All this Russia bullshit sure is doing its job of covering up real fraud that steals pensions and wages, by people right here at home.

Re: No

[Anonymous Coward]

This is news now because Facebook may have violated their published privacy policy after telling the FTC and the regulators in the EU they wouldn't.

At the very least it appears they did no audit or enforcement of restrictions they placed on users of their API.

I hope Facebook had some good hold harmless terms in their agreements with the API users and use them to pass some of any costs along to those developers who abused their authorized access.

Re:No

[Anonymous Coward]

No, but it seems that the Cambridge Analytica mess spilled over and raised more than a dozen eyebrows, and privacy concerns in the UK and here, as well. The authorities have gone into the CA office buildings before any data could be hosed.

The Reg https://theregister.co.uk/ has described how details and metadata collected would even show how much information, when someone who put FB messenger on an android phone would unwittingly list your phone and text, without you explicitly giving FB this opt-in, simply because your contact had that FB/Android combo.

Re: No

[datavirtue]

Facebook is slinging so much data there is no way they have anything under control. There are probably tens of thousands of people who have access to it--the full set. ...and hundreds of thousands who have retained data sets that were supposed to be destroyed. A true First-World disaster.

Re: No

[Anonymous Coward]

The real issue here is that it appears Zuck has been insider trading and potentially extorting people based on the information he has been gathering with his company's resources. This is the REAL problem. But MSM has lied and twisted it to push that it's because of Trump. That's a complete lie. Both Obama and Trump accessed the data under the terms of the TOS. Meaning they used the data exactly as designed and intended.

Re:No

[hey!]

Just because the derivatives market was a disaster doesn't mean you make any kind of valid point by comparing something else you despise to it. What's going on with Facebook is entirely different.

The problem with the derivatives market was a common anti-pattern in human behavior: something that works really well for an individual but fails miserably when everyone tries to do it. Companies used derivative contracts as a kind of speculation insurance, allowing hem to invest more aggressively, treating securities as if they were less risky than they actually were. This is great if it's just your company doing it, but if everyone does it, everyone starts acting as if that risk has simply disappeared. Consequently the market assumed a lot more risk than it should have because it was squirreled away where nobody could see it, through layers of opaque financial instruments. In hindsight the result was inevitable.

Facebook's valuation is something entirely different. Stock prices are based on peoples cumulative beliefs about the future, and because people are valuable, stocks often prove over- or under- priced. It's ordinary human fallibility. Fifteen year ago buying Amazon at $25 a share would seem to a speculation Puritan to be pure foolishness; where were the technical fundamentals to support that price? Amazon's stock value was based on peoples' confidence in its goal of achieving total worldwide retail domination, something that seems less far-fetched today.

Given the bad news, people are feeling less optimistic about Facebook's future, but it's still just an opinion.

Re: No

[grep -v '.*' *]

have retained data sets that were supposed to be destroyed

Can you imagine the SIZE of all of those PST files?

(Oh, so it's just me -- nobody's an Exchange/Outlook admin anymore??)

Re:No

[Anonymous Coward]

the gullibility of stupid people that believe everything they see and hear on Facebook

That seems to be the crux of the issue. I've yet to see anyone either point to or claim direct personal harm from their privacy being violated on Facebook - unlike the Equifax theft where one's credit is of direct issue. Instead it's what, that the Russians and Trump campaign unduly influenced people on Facebook who were nefariously discovered posting monster truck rally pictures?

Re: No

[Anonymous Coward]

Yep. For a decade it was always "It's just a private company, bro!" or "You agreed to it in the ToS, if you don't like it just don't use facebook!" until it helped Trump. Then it instantly became the scandal of the century.

Normally this would annoy me, but facebook's getting fucked so I'll overlook it this time. Only worry is this will now leave Google alone in sole, incontestable control of the Big Brother-ing industry.

Re:No

[Anonymous Coward]

Market 'valuations' and derivatives can only be distinguished by degree. Wall Street is a casino. The only thing the floor needs is cocktail waitresses

stocks often prove over- or under- priced.

Exactly what people bet on. And somebody hit a small jackpot with this little Facebook 'glitch'. Hey, I think it's pretty cool that you can manipulate markets this way. Billions come and go in milliseconds.

Re: No

[PixetaledPikachu]

have retained data sets that were supposed to be destroyed

Can you imagine the SIZE of all of those PST files? (Oh, so it's just me -- nobody's an Exchange/Outlook admin anymore??)

I do. Storage is cheap so we use OST instead PST

Re:No

[Anonymous Coward]

That seems to be the crux of the issue. I've yet to see anyone either point to or claim direct personal harm from their privacy being violated on Facebook

This is the problem. The harm is indirect which means one needs to think in two or more steps.
Unfortunately a lot of people appears to be unable to think that far.
A lot of scams are based on an immediate benefit for the victim with a long term loss.

Too bad DeVos is so hell-bent on dismantling the schools, because we badly need multi-step consequences to be part of education.
Like really, it is like covered in basic philosophy but it seems there is a thing where one should hate on liberal arts right now.
(Despite mathematics being in that category and the significant overlap of philosophy and mathematics.)

Re: No

[Maritz]

No one is accusing them of violating them TOS.

You sound smart. Facebook claim Cambridge Analytica violated their TOS.

Now that the propaganda houses are claiming that Trump is terrible because he used this same data channels as Obama, suddenly everyone is upset because MSM tells them to be upset.

'everything that differs from my view is propaganda'

It's actually quite different. You either choose not to see the difference because you're biased, or you're a stupid cunt. Almost certainly both.

Two factors here are that people are really fucking stupid.

It's painfully, painfully true.

Re: No

[Maritz]

Yep. For a decade it was always "It's just a private company, bro!" or "You agreed to it in the ToS, if you don't like it just don't use facebook!" until it helped Trump. Then it instantly became the scandal of the century.

Normally this would annoy me, but facebook's getting fucked so I'll overlook it this time. Only worry is this will now leave Google alone in sole, incontestable control of the Big Brother-ing industry.

Did Obama's campaign scrape profiles of 50 million completely unrelated individuals who happened to be friends of people who took an online personality test?

I'll answer for you. No.

The reason you think it's the same is: you're a stupid cunt.

Re: No

[Anonymous Cow Ward]

I haven't looked into it much, so maybe you can help: what is the difference between Obama's use of FB and Trump's?

Re: No

[Camarillo Brillo]

DeVoss is only helping to make public schools worse, not the halls of education for the rich. Preppies may still have access to proper philosophical and math tutors and learn to think for themselves.

Re:No

[unixisc]

Facebook's made-up "market value" went down. *POTENTIAL* money was lost. No actual money was lost. RIAA math at work again.

Precisely! How does one do the public valuation of what's simply a glorified website?

It's Back Up

[sexconker]

There were tons of reports of it tanking again today early this morning. Yet minutes after those reports hit, the stock rallied.

It's basically flat for the day. Google and Twitter are up significantly.

I'd like for nothing more than all 3 to tank and die, but it's not happening unless Congress makes it happen. And Congress regulating them will simple establish them further, as competition will be much harder.

Re: It's Back Up

[pdms]

I agree,

Re:It's Back Up

[Anonymous Coward]

Rallied perhaps, by the Zuckmeister himself, as damage control, pending similar investigations in Europe, where privacy is taken very, very seriously, especially when it is not to be monetized.

Full page ads with Mark Z's apologies in the US papers, as well as overseas.

And a poll with the missing caption, as the "cherry on top"

Re:It's Back Up

[Anonymous Coward]

I really dislike this mentality of "we all wish these services would protect our privacy or go away, but they won't unless the government forces them to."

Vote with your dollar and with your clicks. We can control these companies rather than let them control us.

Re:It's Back Up

[datavirtue]

I wonder if they are going to get a real CEO now? The board in most companies would definitely end their CEO for this.

Re:It's Back Up

[datavirtue]

You can't apologize out of this. Council should have an effective gag order in place.

Re:It's Back Up

[datavirtue]

Way too many plebs use the "service." If every intelligent person left FB (went dark) right now it would trundle on as if nothing happened.

Re:It's Back Up

[PeterGM]

We can, you're absolutely right... but it takes informed knowledge, effort, and motivation to do so.

Any combination of those things are widely lacking in the world of the average Internet user.

I used to think it would be a good thing if everyone used the Internet. I've never missed 1996 as much as I do now, and not just for my hairline.

Re:It's Back Up

[Anonymous Coward]

The intelligence communities are the largest consumers of these companies. In fact, Twitter literally exists because of the intelligence communities. To date Twitter has lost over a billion dollars with no profitability on the horizon. By any and all measures Twitter should not exist. There is no capitalist market forces keeping Twitter alive. Twitter survives for reasons which are antithetic to capitalism - year after year after year... That tells you everything you need to know about Twitter.

Google was started with deep state intelligence seed money. Since Google's inception, Google has been designed to harvest intelligence for the government. It's why Google is the NSA' data warehousing contractor. NSA's technology is Google's technology. That's why Bush closed all of those newly built NSA data centers - for which Obama wrongly claimed credit. They no longer needed all those buildings because Google was so effective at increasing the NSA' effectiveness with fewer data centers.

Facebook was an accident which too quickly found deep state intelligence seed money. They found the owner to be a complete schumbag who was more than happy to sell people out for money. As is evident by his own email bragging about how stupid people are who are dumb enough to trust him with their information.

It's time to extract your heads from your asses people. Twitter, Facebook Google are the government's Big Brother. They exist to spy on you. A fact even Putin has acknowledged. Putin has enviously stated that the US government has created a better KGB than the KGB could have ever dreamed. Take time to ponder that.

Re:It's Back Up

[pots]

And Congress regulating them will simple establish them further, as competition will be much harder.

You say this as though regulatory lock-in is the only possible result of regulation. Use your imagination a little, instead of just assuming. If congress were to simply implement some limitations on the collection and storage of data it would devastate their business model (except for Twitter, who doesn't seem to have any mechanism for making money) while giving them no advantages over other startups that they don't already have. No lock-in.

If congress were to slap them on the wrist and say that they could do whatever they want as long as they buried some wavier down deep inside of a three hundred page click-through EULA, then all of their potential competitors would have to spend their inadequate resources on hiring lawyers to write long EULAs. That is lock-in. It's not inevitable, but it can happen.

Re:It's Back Up

[ColdWetDog]

#TightenTheTinfoil

Re:It's Back Up

[Anonymous Coward]

You should take your tinfoil off. This was actually covered by mainstream.

Fuck off troll.

Re: It's Back Up

[Anonymous Coward]

Yes. Why is it not shut down during the investigation?

Re: It's Back Up

[Camarillo Brillo]

Hmmmm, interesting conspiracy theories, but do you have any references for these claims ?

Ridiculous valuation

[innocent_white_lamb]

How many businesses could lose $100 billion dollars and still be operating?

Obviously the valuation of this sort of thing is greatly overblown and has nothing to do with real world work or returns.

Re:Ridiculous valuation

[belthize1072]

Think of it like a horse race. It's not that the horse is slower, just a lot of people think the horse fractious in the gate and doubt the ginger beer trick is going to help.

Re:Ridiculous valuation

[Anonymous Coward]

Facebook didn't lose a nickel. The paper value of the companies outstanding stocks lost money, but that has next to no bearing on the company itself.

Re:Ridiculous valuation

[Anonymous Coward]

This is completely false. The business lost exactly $0. Some several thousands or millions of shmucks who own imaginary papers called stocks lost $100 billion.

Re:Ridiculous valuation

[Anonymous Coward]

How many businesses could lose $100 billion dollars and still be operating?

They didn't actually lose much of anything, especially in the long run. Think of it this way. Suppose that you bought a brand new home for $200,000 and then two months later a guy walks by and offers to buy the home for $10? Does that suddenly make your asset worth only $10? Would you consider yourself to have "lost" $199,990 just because some random person came by and tried to low ball you? Of course not. The scenario is ridiculous, but it does serve to illustrate a point. The stock market allows for offers to buy or sell securities on a continuous basis which means that the prices move in either direction hundreds of thousands or even millions of times per day. The price of Facebook on any given day is more or less noise and only fools and greater fools allow themselves to be distracted by that nonsense. Have you figured it out yet? The financial industry is constantly trying to get you to look at the shiny thing (i.e. prices) with lots of fancy charts and jargon spiced with mathematical quackery to lend an air of legitimacy and yet do you know how many genius investors beat the market average over any given 10 year period? It's more or less zero with 99.999% probability.

Re:Ridiculous valuation

[Anonymous Coward]

How many businesses could lose $100 billion dollars and still be operating?

Depends on their size. In this case FB has dropped about 10% of it's value. Bad, but not that bad.

Re:Ridiculous valuation

[thegarbz]

How many businesses could lose $100 billion dollars and still be operating?

How many businesses have 1/4 of the population of the entire world as their user base?

Don't underestimate the sheer monster that Facebook has become, and based on what we know about how much information they have on us is that value really so surprising?

That's without getting into any discussion about what Sharemarket value actually means for a business (hint: nothing, during the GOM oil spill BP was valued by shareholders as less than the cost of the assets + oil sitting in storage which is absurd for a company that had healthy cashflow)

As usuall missleading headlines

[Dorianny]

Facebook Corp. hasn't lost anything. Those shares were sold or given away already. The holders of Facebook stock lost a couple of % of the paper value

Re:As usuall missleading headlines

[mspohr]

Yes, it's the stockholders who have lost. From a high near $200 in early Feb to $160 today, they've lost 20%... but only if they bought at the high and sold today. For most people, it's just paper losses (or smaller gains).

Re: As usuall missleading headlines

[Anonymous Coward]

If you owned 100 shares bought at the peak, and now sold them, you'd have a loss the IRS would recognize . And you'd now have less $ than before. Seems real enough.

Boohoo

[DarkRookie]

They have $90,000,000,000.
Why should I ever feel sorry for this company.

15% loss now

[Anonymous Coward]

I hate the way that stocks only show the top bit, its distracting from the overall change IMO.

Anyway, some simple math:
$38.23 on 18 May 2012
$190.28 on 02 Feb 2018
$160.06 on 26 Mar 2018
So it has fallen about 15% as of now.
Could cost up to $2T based on 50M accounts at $40K per violation, roughly 400% of facebooks total *current* worth.

Source:
https://www.google.com/search?rlz=1C1GCEA_enUS770US770&q=NASDAQ:FB&stick=H4sIAAAAAAAAAONgecRoyi3w8sc9YSmdSWtOXmNU4-IKzsgvd80rySypFJLgYoOy-KR4uLj0c_UNiqosM0pyeAC6ZzDPOgAAAA&sa=X&ved=2ahUKEwjr0Kb47oraAhUCRa0KHRK0DYsQlDMwHHoFCAAQoQE&biw=2269&bih=1144&dpr=1.13
(or just google 'NASDAQ:FB')

Double standards

[Anonymous Coward]

It is too bad they won't go after Equifax to the same degree they are going after Facebook.

Re:Double standards

[Anonymous Coward]

You deserve to be modded up

Re:Double standards

[BlueStrat]

It is too bad they won't go after Equifax to the same degree they are going after Facebook.

If the Trump campaign had some link to Equifax then they, too, would be under the gun.

The ONLY reason Facebook is being trashed is because the Left thinks FB/Zucky helped Trump knowingly or unknowingly. That's it. That's the only reason. The people screaming for investigations had no problem with Democrats using FB data for election demographics purposes, nor did they have any real issues with FB's invasiveness regarding privacy prior other than as a minor side-issue they had to make the right noises about.

I'm happy to see more people becoming aware of the importance of privacy, but the hypocrisy surrounding this shitshow is over 9000.

Strat

Re:Double standards

[Anonymous Coward]

The people screaming for investigations had no problem with Democrats using FB data for election demographics purposes, nor did they have any real issues with FB's invasiveness regarding privacy prior other than as a minor side-issue they had to make the right noises about.

Funny how when the Obama campaign engaged in "micro targeting" using FB, it was the wave of the future and the darling of technologists and futurists, but when Trump comes along and pulls the same levers it's an exercise in pure evil and an existential crisis. Democrats like fancy new political weapons except when their opponents turn around and give them a taste of their own medicine.

Re:Double standards

[Anonymous Coward]

As a big time Trump supporter and never a Facebook user I don't get it. It's just some website. If people let a website tell them what to do well they still have their vote for either candidate.

I do hope FB just goes away.

Re:Double standards

[thegarbz]

The people screaming for investigations had no problem with Democrats using FB data for election demographics purposes

The people making this claim don't see some very big and critical differences between the two cases, not the least of which involves a lack of foreign 3rd party entities influencing elections in the democrat's case. The only people who think this is about Facebook itself are those who have a partisan axe to grind.

Hint: It wasn't Facebook's headquarters that was raided.

Re:Double standards

[DRJlaw]

The ONLY reason Facebook is being trashed is because the Left thinks FB/Zucky helped Trump knowingly or unknowingly. That's it. That's the only reason. The people screaming for investigations had no problem with Democrats using FB data for election demographics purposes, nor did they have any real issues with FB's invasiveness regarding privacy prior other than as a minor side-issue they had to make the right noises about.

Yes -- there's no difference between openly using Facebook's own advertising tools to microtarget voters and exfiltrating the "social graphs" of 50 million people to a third party (but just one, we promise) by getting 300 thousand people to take a "personality test" run by an academic because nonacademic entities were prohibited from downloading raw graph information from Facebook.

It's totally a double standard, and the differences in what happened are not important at all.

That's it. That's the only reason.

In your feeble mind.

Re:Double standards

[Anonymous Coward]

not the least of which involves a lack of foreign 3rd party entities influencing elections in the democrat's case.

Steele dossier.

What surprises me

[jetkust]

I always assumed people using Facebook didn't particularly care about what happens with their data, so I'm no sure who all of a sudden is outraged. I assumed it was way worse than this. Plus why focus on Facebook. There are data brokerage companies out there that are probably doing way creepier things than this.

Re:What surprises me

[srichard25]

No one was upset until Trump used the data. Obama was a modern-day genius when he used the data, and thousands of unknown companies having the data was fine. But Trump using it is what caused some people to go bonkers.

Re: What surprises me

[Anonymous Coward]

Could it be because most people dislike trump and think he is a loudmouthed boorish idiot?

Re: What surprises me

[Anonymous Coward]

Even if true, that doesn't magically turn what was dismissed for 10 years as normal, legal, benign behavior that only luddites would worry about into a massive scandal.

Proper evaluation

[dremon]

To proper evaluate the market value (or, rather, the importance for the global society) simply imagine the consequences of sudden disappearance of the business.

What happens if those overblown tech giants (Facebook, Twitter, Uber, Apple, whatever shit) cease to exist? NOTHING. Some moderate annoyance and shit on the fan for a relatively large group of people. The world moves on, many won't even notice. "Oh dear, we won't get a brand new iAssScratcher this year, what a drama!".

Now, how about John Deere? Market cap 10 times less than the Facepalm, their agricultural machines work probably on half of the Earth's fields. Imagine the consequences of that being vanished.
Or Gazprom, also 10 times less than the bunch of PHP scripts, what happens when there comes no gas anymore, a major fucking blow to the little dream castle of greenpeacers and also huge impact on the whole civilization.

NSA

[Zorro]

Quietly acquired by "No Such Agency" exists.

Enjoy the Schadenfreude while it lasts

[edtice1559]

Stock prices always rebound after these things once the inquiry is over and the punishment turns out to be nothing more than a slap on the wrist. All this stuff does is transfer wealth from those who panic sell to those who opportunistically buy.

just a paper cut

[epine]

Yes, it's the stockholders who have lost. From a high near $200 in early Feb to $160 today, they've lost 20%... but only if they bought at the high and sold today. For most people, it's just paper losses (or smaller gains).

The stockholders would include almost all of the management, most of the employees, some of the contractors, many key venture capital relationships, and god-knows how many potential activist shareholders, plus speculative financial shops that might be substantially leveraged; 10% is then easily 100%, and 20% could amount to -100% (subject to a hedge floor) should Facebook's price remain depressed.

Ferengi Rule of Disposition #7: Nothing elicits a bigger yawn that someone else's margin call.

Monty Python-The Black Knight

Hmm, much depends on whether the severed arm leaps back up and reunites itself with the brave knight, or remains there decomposing among the dead leaves.

Jew-runberg Mole-paradisestein tracking field.

[Anonymous Coward]

All they ever were. Lure you in using your own "I want 3000 friends" pipe dream. Post all your stuff sure its safe! Safe on our servers forever and if you don't cooperate we will lock you out of your account and keep all your uploads and messages however we want to.

Zuckerberg is less goofy in Hell.

You say that like it's a bad thing

[rsilvergun]

Facebook's business model here is selling your data to anyone who'll pay so they can manipulate you into doing things you otherwise wouldn't want to do. These aren't old school marketing pitches where they tell you why the product/candidate/proposition is so great. These are fine targeted propaganda campaigns where use your prejudices and peccadilloes to push your buttons.

I'm all for putting a stop to competition in that fast growing field.

#deletefacebook worked for me

[imidan]

I just finished deleting my Facebook account. I downloaded their data on me just to look at it, first. Luckily, I never told Facebook very much about me, never installed the app on my phone, rarely logged in, and clear cookies every time I close my browser, so their data on me looks pretty sparse.

I originally created the account because of a scare article suggesting that someone nefarious might create a Facebook account on my behalf and then post bad stuff there. Unlikely, I know, but it seemed a trivial precaution to take. I kept the account because of inertia, and because people (including some employers) started thinking it was weird if you didn't have a Facebook account. Now, I can use the cover of #deletefacebook to explain why I have no profile there.

Those data brokers aren't as tied into

[rsilvergun]

people's lives. Facebook is so big it's practically a public utility at this point. The US has something like 214 million users. That's more than half the population. I doubt you can find a functioning adult who doesn't have an account.

Re:Those data brokers aren't as tied into

[Anonymous Coward]

I know several people, including my self who have never had an account on FB and function quite well. I would argue I function better than people who are addicted to that nonsense.

Any (New) Bad?

[BrianMarshall]

So... where is the (new) bad for FB?

From what (little) I know about this, it sorta seems like CA was the bad actor and maybe FB should sue them for breach of the TOS.

Punishment for CA suspension

[Anonymous Coward]

I think everyone currently in power had no problem with facebook data collection....until they suspended the information warfare arm of the current regime (Cambridge Analytica). Surprise, now the republican FTC is investigating them.

Facebook should never have gone public

[sproketboy]

They never needed to. They made plenty of money as a private company. They only went public so insiders could make a killing on the early stock trades. Now they're stuck with the gov who's going to make them a public utility. I'm fine with that since I hate Zuk and Facebook.

Can we PLEASE do this for ALL platforms? Windows10

[Anonymous Coward]

for one. Phones, Roombas, Google, Android, Windows 10, Office, Samsung TVs, hell even Onkyo receivers have TERRIFYING privacy policies.

Let's not allow the 2010s to TOTALLY be about user-hostile, data privacy forced-removal.

I'm in tears

[Anonymous Coward]

Tears of Joy.

PST file sizes?

[unixisc]

have retained data sets that were supposed to be destroyed

Can you imagine the SIZE of all of those PST files? (Oh, so it's just me -- nobody's an Exchange/Outlook admin anymore??)

Size of PST files? It's been a while since I last used Outlook, but don't PST files have a limit of 2GB, beyond which they can't grow?