Facebook, Inc. FB recently submitted a document to U.S. lawmakers comprising of the company’s responses to more than 2000 questions from the Senate and House Committees, pertaining to the infamous Cambridge Analytica data breach.
Per the data misuse scam, the company had allegedly compromised on the safety of personal data belonging to around 87 million users and also impacted the 2016 Presidential Elections’ results. In this regard, the company had encountered industrywide criticism from the heads of prominent players like Twitter TWTR, Apple AAPL, Tesla TSLA, et. al.
In a recent statement made by Facebook, the company mentioned that its data sharing policy witnessed a change in 2015. But even after restricting the usage of user information, the company had granted a few companies a six-month extension to work in compliance with the new policy.
The companies conceded with this special permission were Audi, AOL, Nike, Oracle, Panasonic, Snap and Spotify among others. Facebook also noted that Serotek, an accessibility application provider, was awarded an eight-month extension period till January 2016.
In addition, the company stated that a few third-party application developers might have received some user data due to a beta test. However, as of now, the technical capabilities of these companies to access any “friend’s data” has been withdrawn by Facebook.
Notably, apart from the U.S., the U.K. lawmakers have also intensified the investigation process related to “harvesting of personal information.”
Data Privacy Measures Helped Shares Rebound
The company drew a lot of flak from the different quarters of the industry. But despite all the backlashes, it did not fail to impress investors with its spectacular results in first-quarter 2018. Facebook, which earns above 95% of its revenues from advertisements, registered 42.3% year-over-year top-line growth valued at $11.97 billion.
Notably, post the data breach news revelation in March, shares of the company lost around 20%. However, the stock also managed to rebound over the past two months. In fact, Facebook has returned 10.5% over the past six months against the industry’s decline of 3.6%.
Let’s take a look at the recent developments and initiatives taken up by Facebook to fight data violation, fake news and unethical campaigns on the platform.
In the statement to the U.S. lawmakers, Facebook notified that the application “allows people to view, manage, and remove the apps that they have logged into with Facebook through the App Dashboard.” As part of the Privacy Checkup, the company recently asked its users to review the Application Dashboard. This is to keep a vigil on the information used by third-party application providers.
Additionally, the talks of Facebook using blockchain technology for securing data handling process are also doing the rounds. The technology’s decentralized, transparent and incorruptible characteristics are likely to aid in preventing data infringement.
Facebook also collaborated with Atlantic Council and the Digital Forensic Research Lab owned by the latter for better monitoring of dis-informative campaigns on the platform.
A few days back, the company also stated that beginning May 24, all ads related to elections and other political issues on either Facebook or its photo sharing application Instagram, would have to be labeled with the payer’s name in the disclaimer section.
The respective label will redirect the user to a “searchable archive” to provide information on the budget of the campaign, number of viewers as well as the demographic details of the audience. People buying political advertisements would have to mention their identity and location.
This apart, the company removed accounts and pages from its platform, allegedly involved in influencing the election results and has also backed the Honest Ads Act. The company has also appointed employees to keep a close watch on the online campaigns and has also invested in artificial intelligence to combat the data leak threats.
We believe, these recent developments and investments from the company will tactfully handle the data breach related risks to further aid in increasing user engagement and instilling investors’ confidence in this Zacks Rank #3 (Hold) stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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