Embattled company’s revenue under fresh scrutiny after a series of damaging disclosures
Facebook has faced increasing pressure from Congress in recent years due to a series of scandals regarding its business practices, but negative publicity hasn’t stopped the social media giant from generating massive revenue.
The embattled company’s earnings are under fresh scrutiny after several bad news reports and congressional testimony alleges that Facebook executives are aware their platforms are causing harm, but haven’t been able to address the problems. Not enough action has been taken. A former employee, whistleblower Frances Haugen, told Congress that Facebook has “put its astronomical advantage before the people.”
Facebook has emerged as one of the most lucrative companies in the world since going public in 2012. The company’s revenue has grown from $5 billion in its fiscal year 2012 to nearly $86 billion in fiscal 2020, with most of its sales coming from advertising.
The company’s annual revenue grew 22% year-on-year in 2020 despite the impact of the COVID-19 pandemic. Despite ongoing concerns about its business practices and recent declines related to whistleblower disclosures, Facebook’s share price is up more than 24% so far this year, bringing the company’s market capitalization to more than $940 billion. .
Lawyer for Facebook whistleblower says ‘more to come’
Haugen’s testimony is the most recent in a series of public setbacks for Facebook. In the past few years alone, Facebook has faced unprecedented antitrust scrutiny from federal regulators, user data privacy breaches that resulted in a record $5 billion FTC fine in 2019, and its handling of misinformation during the pandemic— There has also been widespread criticism. 2016 and 2020 presidential election cycles.
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Facebook’s hearing confirms fears about the company’s business model. now what?
The latest problem began when the Wall Street Journal published a series of critical reports called “Facebook Files” based on leaked internal documents provided by Haugen.
The report included internal research that acknowledged that Instagram was negatively affecting the mental health of teen users — a revelation that prompted the Senate Commerce Committee to convene a hearing on social media’s impact on child safety.
During his testimony, Haugen argued that Congress should regulate Facebook.
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“Facebook products harm children, promote division and undermine our democracy,” Haugen said. “The company’s leadership knows how to make Facebook and Instagram secure, but they won’t make the necessary changes because they put their astronomical advantage in front of the public.”
Haugen’s attorney said Wednesday that there are more disclosures to come from Haugen’s document trove, indicating that they will reveal details about Facebook’s role in the January 6 Capitol riots. Granthshala News confirmed that Haughan will speak with the selection committee on Capitol Hill on Thursday, Jan.
Facebook executives have sharply criticized Haugen’s comments, insisting that internal research has been misunderstood and the company is actively working to address harmful elements of its business.
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Facebook CEO Mark Zuckerberg wrote in a post on the situation, “We are committed to doing the best we can, but the right body to assess the tradeoff between social equality at some level is our democratically elected Congress.”