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Facebook Roundup: UK Actions, Terrorist Content, Portal, Lasso

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Facebook (FB - Free Report) faces UK sanctions, Irish scrutiny, reports on tracking down terrorist content, launches smart display Portal and social video app Lasso. Here are the details-

UK Actions Against Facebook

The British Commissioner, which earlier fined Facebook 500,000 pounds ($653,800) for misuse of user data has now referred certain other data related concerns to Ireland, where Facebook has its EU headquarters. The Commissioner is particularly concerned about Facebook’s “targeting functions and techniques that are used to monitor individuals’ browsing habits, interactions and behavior across the Internet and different devices.”

The Irish Data Protection Commission (DPC) will assess the information before deciding the next steps. The company may be fined up to 4% of its annual revenue under the EU’s GDPR if it is found to have violated its data processing and handling rules.

Facebook’s problems in the UK are not just regarding the Cambridge Analytica scandal but also its failure to tackle fake political ads and Zuckerberg’s refusal to appear before the government to address privacy concerns.

The company declined a request from British and Canadian lawmakers for his attendance of a special joint parliamentary hearing in London on Nov 27, similar to what Alphabet (GOOGL - Free Report) did in the U.S. In its letter, the company acknowledged "the seriousness of the Cambridge Analytica issue" but said that it had already submitted written answers to lawmakers' inquiries and given extensive testimony in the UK Parliament. It also said that it remains committed "to provide any additional relevant information."

Not only is this insufficient to pacify lawmakers who naturally demand "the same line of accountability" as shown in the U.S. and EU, but it has also led other countries like Argentina, Australia and Ireland to make similar demands.

Tackling Terrorist Content

Facebook has provided a progress report on its fight against terrorist content. The company says it has removed 12.4 million content pieces in the first three quarters of 2018, although a chunk of these were old posts.  It took down 1.9 million posts in the first quarter, 9.4 million in the second and 3 million in the third.

The company said that its machine learning tools are helping it discover the content and that the system was good enough to remove posts on its own where it was confident. In other cases, the removals were made by trained humans.

The response time after a user reports a post has also gotten shorter with the median time falling from 43 hours in the first quarter to 22 hours in the second and 18 hours in the third.

Portal Opens Up a New Frontier

Facebook announced availability of the $199 Portal with a 10.1-inch screen and the $349 Portal+ with a rotating 15.6-inch screen. They're basically smart displays with a focus on video chat through Messenger that the company says has your privacy in mind:

  • Facebook does not listen to, view or keep the contents of your Portal video calls. This means nothing you say on a Portal video call is accessed by Facebook or used for advertising.
  • Portal video calls are encrypted, so your calls are secure.
  • Smart Camera and Smart Sound use A.I. technology that runs locally on Portal, not on Facebook servers. Portal’s camera doesn’t identify who you are.

The video can be locked to your face so it doesn’t move on to other things when you start moving around, but the chat is most satisfying when it’s Portal-to-Portal because picture quality on other devices may not be as great.

If you don’t want the efficient camera and microphones to track you all day, you can simply flip a switch. In that case, you also need to flip it back on to accept voice commands. You can also plastic-cover the camera while leaving the mike on for voice commands.

There’s a very small selection of apps that come preloaded and there’s also no app store. But YouTube being there is a positive. Plus support for both Amazon's (AMZN - Free Report) Alexa and Google Assistant.

This seems like more of an idea that Facebook is fleshing out rather than a serious product, so there will likely be more devices, and if things look good, maybe the app store as well.

Ads aren’t the goal right now, and if it follows the same policy as with other products, there likely won’t be ads until it accumulates a sizeable user base. But ads on things like YouTube are supported.

Keeping Tweens Is Difficult

Facebook has launched Lasso for iOS and Android, a lip syncing app that allows you to create and share 15-second videos overlayed with music from a huge library that Facebook has by virtue of the licensing deals it has signed with major publishers and record labels earlier this year.

Its success is, however, not a given partly because Brady Voss, one of the leading creators, has already moved to Netflix (NFLX - Free Report) and it doesn’t seem like he would have if it had much of a chance.  

The other problem is the considerable competition from TikTok (formerly musical.ly that merged with the Chinese company of the same name). TikTok has moved up ahead of Snapchat, Instagram and YouTube on the download charts to No. 5 on the U.S. iOS overall charts and No. 1 in Photo and Video. Lasso is not yet in the top 200 mainly because it isn’t bringing anything new to the table yet. But some form of integration with Instagram and Facebook could change that situation.

The app is obviously targeted at tweens that have fled to YouTube, Instagram and Snapchat instead: a recent Pew Research Century survey of people aged 13 to 17 in the U.S. showed that only half prefer Facebook to these platforms today compared to the majority back in 2015.

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Facebook shares carry a Zacks Rank #3 (Hold). For safer bets, see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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