Social media giant Facebook Inc. (FB) is marred litigations this year. Let’s take a look at some of the lawsuits that the company is facing on various fronts.
The latest lawsuit was filed by a group of advertisers alleging that Facebook inflated its average video viewing figures by omitting views with durations of less than 3 seconds and failed to disclose this matter to them.
Although the distorted numbers had no relation to paid advertisements, there is a chance it might have misled brands in terms of the platform’s effectiveness. The plaintiffs said that the company displayed carelessness and apathy on the accuracy of its numbers, a claim that Facebook denied, stating that it updated its customers and its help center on the issue. Facebook is seeking to dismiss the lawsuit on grounds that it holds no merit.
Access token security breach
Facebook is facing class-action lawsuits from two different parties in California and Virginia for its recent security hack that affected the access tokens of 50 million user accounts. The company is said to be facing a fine of $1.63 billion in the EU for the same under the GDPR.
In July, when Facebook reported its second-quarter results, it disappointed investors with revenues that missed expectations and a bleak outlook for profit margins and growth. The stock dropped over 20% wiping out $120 billion from the company’s market value, marking one of the worst one-day stock declines on Wall Street.
Following the stock plunge, a shareholder filed a lawsuit against the company accusing it of making misleading statements or not disclosing slowdown in revenue growth, margins and users.
Logging texts and calls
Facebook is facing a class action lawsuit over allegations that the company violated the privacy of users by logging their text messages and phone calls through Android apps and for failing to disclose the matter.
Facebook is said to be facing three dozen class action lawsuits over the data privacy scandal. The company faced lawsuits from advocacy groups in the UK as well and was fined $662,501 by the Information Commissioner’s Office (ICO) in the country.
While many of these lawsuits are yet to arrive at settlements or verdicts, there is a possibility that Facebook may face large amounts in fines over these matters, which are likely to take a toll on its future profitability.
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