Embattled social media giant Facebook faces challenges on several fronts this week as regulators and pundits scrutinize everything from its planned cryptocurrency to its efforts to address bias.
European Union antitrust regulators have launched a probe into Libra, the Facebook-backed cryptocurrency, amid concerns that the payment system could unfairly impact rivals and hurt competition, Bloomberg reported. In a separate dispute, Facebook faced bipartisan criticism after the release of an internal audit of alleged conservative bias on its platform, which did not definitively say whether there was found evidence to support claims that the social media platform suppresses conservative voices.
Neither development had a discernible impact on Facebook stock, as shares were flat for the week through the end of trading on Wednesday and are up nearly 40 percent for the year as earnings remain strong.
“I think we've passed the tipping point of negative publicity on Facebook,” said Arun Sundararajan, a professor at New York University’s Stern School of Business. “Users are likely getting immune to new reports relating to privacy or bias, so it is possible that Facebook is over the most challenging phase on this front. As the antitrust cases against Facebook pick up steam, they are likely to become the primary investor focus.”
Wall Street has remained mostly bullish on Facebook in recent years despite unprecedented scrutiny of its data practices, allegations of political bias and evident government mistrust of Libra. The social media giant agreed to pay out a $5 billion fine to settle a Federal Trade Commission probe of its data privacy efforts last July – the largest such fine in history. The settlement also required CEO Mark Zuckerberg to personally certify compliance with FTC guidelines on a quarterly basis.
The possibility of a full-fledged antitrust investigation in Europe comes as Facebook weathers bipartisan criticism of Libra among U.S. lawmakers, with many calling on the company to halt its project entirely. Both the FTC and Justice Department have opened antitrust investigations into Facebook’s business model.
With the 2020 election cycle approaching, repeated criticism from President Trump and other conservative leaders have placed Facebook’s handling of bias allegations in the spotlight. Liberal pundits ripped Facebook’s audit for lending credence to bias claims, while conservatives ripped the platform for failing to provide an actionable solution.
“Merely asking somebody to listen to conservatives’ concerns isn’t an ‘audit,’ it’s a smokescreen disguised as a solution,” Sen. Josh Hawley (R-Mo.) said in a statement. “Facebook should conduct an actual audit by giving a trusted third party access to its algorithm, its key documents, and its content moderation protocols. Then Facebook should release the results to the public.”