'Anti-competitive' Facebook nervously awaits stock market verdict after leak

Facebook shares took a sharp fall as stock markets opened on Thursday, a day after a secret trove of documents was leaked. 

Shares opened around 2.5 per cent down, wiping an estimated $9.5billion off the company's $379billion value, but rebounded slightly to 1 per cent down 90 minutes after trading started.

The documents showed Facebook 'aggressively' pursued competitors, used its platform to cripple rivals, and leverage developers for advertising money, setting up conflicts with regulators and politicians around the globe. 

Stock investment firm Stiefel had downgraded Facebook's shares ahead of markets opening in New York, saying the company has made 'too many adversaries' for its business to thrive.  

Facebook shares took a pummeling in early trading, opening 2.5 per cent down and wiping around $9.5billion of the company's value

Facebook shares took a pummeling in early trading, opening 2.5 per cent down and wiping around $9.5billion of the company's value

Facebook will be hoping to avoid another crash after shares in the company fell by $119billion in a day back in July, marking the single largest fall in market history.

Mark Zuckerberg saw $12billion wiped off his value as a result of the plunge.  

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.

The EU is aggressively cracking down on tech monopolies and this summer fined Google a record $5billion for breaching its competition laws.

What are the accusations against Facebook?

Facebook is facing allegations from all over the world that it has been used to spread 'fake news', interfere with elections, and peddle hate.

It is also facing hugely damaging revelations of privacy data breaches among its accounts.

Here are some of the controversies it has been embroiled in: 

'Fake news' and Russia 

Facebook has come under the spotlight amid claims that Russian accounts used the platform to spread 'fake news' during the 2016  Brexit referendum.

In America, Russians accounts have been accused of using Facebook to harm Hilary Clinton's prospects of being elected over Donald

In the UK, some have claimed that misleading information was used to promote Brexit in the run up to the 2016 referendum. 

Cambridge Analytica Scandal:

The data of around 87 million Facebook users was harvested by the company Cambridge Analytica (CA).

It has been claimed CA used the information to assess peoples' personalities and come up with political strategies to sway voters to back Brexit and Donald .

Spread of extremism and hate

Facebook has been repeatedly criticised for not being quick enough to take extremist content down from its site.

Critics have warned that Facebook has become a safe haven for extremists who peddle hate and try to recruit jihadis to kill and maim.

Regulators found the search engine abused its market dominance with the Android operating system to strong-arm people into using its Chrome browser and apps.

Google also banned rivals from selling devices that used operating systems based on Android, which the EU said was in breach of its rules.

While the EU has so far been silent on the Facebook leak, regulators are certain to be aware of it and will likely investigate whether the social media giant broke any laws. 

The documents also 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 

Politicians digging into the spread of fake news online, led by British MP Damian Collins, who leaked the papers, will now have added reason to go after the company for the way it treated users' data.

In choosing to downgrade Facebook's stock from 'buy' to 'hold', warning investors off increasing their holdings in the company, 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.' 

On Wednesday night, former Facebook staff described a 'toxic and hostile' atmosphere at the business.

One former senior employee told Buzzfeed News that workers are desperate for a change of leadership.

'People are hoping for a Sundar or Dara moment,' the worker said referring to Uber's new boss Dara Khosrowshahi and Google's chief Sundar Pichai.

Another said staff fear being scolded by furious bosses who are 'spouting full-blown anti-media rhetoric, saying that the press is ganging up on Facebook.'

Documents showed Facebook used its platform to cripple competitors and leverage developers for advertising money, putting it on a collision-course with regulators

Documents showed Facebook used its platform to cripple competitors and leverage developers for advertising money, putting it on a collision-course with regulators

What do the Facebook emails say? 

1. Facebook planned to let its android app read users' call records in which it admitted was a 'pretty high-risk thing to do from a PR perspective'

Michael LeBeau (Facebook product manager) wrote on 4 February 2015:

'As you know all the growth team is planning on shipping a permissions update on Android at the end of this month. They are going to include the 'read call log' permission... This is a pretty high-risk thing to do from a PR perspective but it appears that the growth team will charge ahead and do it.'

2. Facebook aggressively stopped rivals from accessing its users' data to maintain dominance, causing many apps to fail. CEO Mark Zuckerberg personally approved a decision to block Twitter's app Vine from accessing users' Facebook friends lists.

Justin Osofksy (Facebook vice president) wrote on 24 January 2012: 'Twitter launched Vine today which lets you shoot multiple short video segments to make one single, 6-second video... Unless anyone raises objections, we will shut down their friends API access today. We've prepared reactive PR, and I will let Jana know our decision.'

CEO Mark Zuckerberg replied: 'Yup, go for it.'   

3. Mr Zuckerberg said he was 'sceptical' that apps with access Facebook users' data would pass this data on, as then happened in the Cambridge Analytica scandal in 2016

In a 2012 email to Sam Lessin, the company's former VP of Project Management, Mr Zuckerberg wrote: 

'I'm generally skeptical that there is as much data leak strategic risk as you think.

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