Facebook, Inc. FB was set to open down 3 percent Thursday after the U.K. Parliament released a cache of seized emails late Wednesday.
What Happened
Correspondence between CEO Mark Zuckerberg and fellow executives revealed intent to stifle competition and to monetize user data via various avenues. They also show that Facebook:
- Granted special data access to some third-party developers and companies like Netflix Inc. NFLX and Airbnb, while withholding access to certain services from some strategic competitors, like Twitter Inc TWTR;
- Deeply involved Zuckerberg in business decisions throughout its growth; and
- Years back, considered charging developers to access data.
Zuckerberg defended the emails as a record of brainstorming rather than strategizing.
“Like any organization, we had a lot of internal discussion and people raised different ideas,” he said in a Wednesday Facebook post. “Ultimately, we decided on a model where we continued to provide the developer platform for free and developers could choose to buy ads if they wanted. This model has worked well.”
He added that many of the proposals were raised to address the proliferation abusive apps in 2014 and 2015.
Why It’s Important
The information could exacerbate Facebook’s regulatory struggles. Both the U.S. and Europe have scrutinized the firm for its policies around user privacy, competition and control over platform access.
“[The documents] not only show evidence of wrongdoing with regards to user privacy, but they demonstrate substantial anticompetitive practices in the way they leveraged user data,” Ashkan Soltani, a former chief technologist for the Federal Trade Commission, told the WSJ.
The FTC has been investigating Facebook for potential violation of a user consent agreement.
How U.K. regulators and the FTC intend to react to this leak is yet unknown.
Related Links:
Analysis: The Facebook Data Controversy, And Why Wall Street Could Take It Harder Than Washington
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