Facebook Stands to Lose Tens of BILLIONS in Dozens of Lawsuits
Facebook stocks plunged precipitously on Thursday after the company's earnings report showed they missed expectations on revenue and that the social media platform's monthly users are down significantly. All of this comes in the wake of ongoing scandals, including charges of data misuse and anti-conservative bias.
"During a conference call Wednesday, Facebook Chief Financial Officer David Wehner predicted bad news for the second half, and the company’s shares immediately began a drastic retreat in the extended session," Marketwatch reported on Thursday.
According to Reuters, "Facebook shares dived 18.6 percent, set for its biggest one-day percentage drop ever, after the social media giant said profit margins would plummet for years due to costs to improve privacy safeguards and slowing usage in its big advertising markets."
But stock prices aren't the only problems facing the beleaguered social media behemoth. The company is facing massive fines and possible government intervention as lawsuits pile up in the U.S. and around the world. In fact, Facebook is facing more than three dozen class-action lawsuits over Cambridge Analytica privacy breaches alone. The looming legal nightmare is so significant that the company felt the need to include a note about it in their quarterly SEC report:
Beginning on March 20, 2018, multiple putative class actions and derivative actions were filed in state and federal courts in the United States and elsewhere against us and certain of our directors and officers alleging violations of securities laws, breach of fiduciary duties, and other causes of action in connection with the misuse of certain data by a developer that shared such data with third parties […] the events surrounding this misuse of data became the subject of U.S. Federal Trade Commission and other government inquiries in the United States, Europe, and other jurisdictions. Any such inquiries could subject us to substantial fines and costs, divert resources and the attention of management from our business, or adversely affect our business. [Emphasis added]
Here are a few of the dozens of lawsuits Facebook is facing:
1. Facebook accused of using ad tools to discriminate against older job seekers
PJM's Phil Baker wrote in May that "a potential class-action lawsuit claims that companies are using Facebook’s ad creation tools to create ads for job hunters that discriminate by age, which is against federal law. The lawsuit is not against Facebook, but against a number of companies using their tools to weed out older job hunters."
The suit was filed by the Communications Workers of America, alleging that “when Facebook’s own algorithm disproportionately directs ads to younger workers at the exclusion of older workers, Facebook and the advertisers who are using Facebook as an agent to send their advertisements are engaging in disparate treatment.”
2. Federal judge gives go-ahead for $30 billion Facebook privacy class-action suit