Story at a glance
- Mark Zuckerberg says leaked documents paint a false picture of Facebook.
- The company also faces an antitrust lawsuit by the Federal Trade Commission.
- The company reported $9 billion in profit for its third quarter.
CEO Mark Zuckerberg addressed the national scrutiny his company is facing during a quarterly earnings call on Monday, just as tens of thousands of internal Facebook documents became public through whistleblower Frances Haugen, a former Facebook product manager.
Zuckerberg characterized the situation as, “a coordinated effort to selectively use leaked documents to paint a false picture of our company.”
The leaked documents, known collectively as the Facebook Papers, were shared by Haugen with Congress and disclosed to the Securities and Exchange Commission. The documents relate to Haugen’s testimony on Oct. 5 in front of the Senate Committee on Commerce, Science and Transportation that alleged Facebook allowed misinformation to spread on its site ahead of the 2020 election and that it was not doing enough to counter hate speech, as well as creating a toxic mental health environment for teen girls.
During her Oct. 5 hearing, Haugen emphasized, “the choices being made inside Facebook’s leadership are a huge problem — for our children, for our public safety, for our democracy.”
Zuckerberg appeared to respond to Haugen’s accusations on Monday saying, “It makes a good soundbite to say that we don’t solve these impossible tradeoffs because we’re just focused on making money, but the reality is these questions are not primarily about our business, but about balancing different difficult social values.”
Facebook faces many more challenges beyond Haugen. The company faces a lawsuit by the Federal Trade Commission (FTC) that seeks to force Facebook to restructure or sell off its assets, Instagram and WhatsApp, to break up what the FTC views as a monopoly over personal social networking in the United States.
The company is also facing a serious threat to its advertising business. After Apple implemented a new privacy change to its iOS limiting access to user data, Facebook COO Sheryl Sandberg told investors during Monday’s earnings call, “we’ve encountered two challenges: one is that the accuracy of our ad targeting decreased, which increased the cost of driving outcomes for our advertisers, and the other is that measuring those outcomes became more difficult.”
Dan Ives, Wedbush Securities managing director, told the New York Post, “Apple’s data privacy issues can do more damage than regulators.”
However, Facebook is still moving forward with new projects. Beginning in the fourth quarter, Facebook Reality Labs will be introduced, a new business arm focused on augmented and virtual reality services.
The company also reported $29 billion in revenue for its third quarter, a 35 percent increase from the same period last year. It also posted $9 billion in profit, up 17 percent from the same period last year.
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