Back to top

Facebook (FB) Struggles to Regulate Content on Its Platform

Read MoreHide Full Article

Facebook’s (FB - Free Report) troubles continue to mount due to concerns over security of the platform. A recent New York Times article brought to light the irregularities of the company’s content standards.

The article states that moderators who are responsible for regulating the content on the platform rely on some outdated and incorrect information. Third-party moderators are required to monitor huge amount of content produced by Facebook’s 2.6 billion users in a very limited time.

Facebook’s approach of one size fits all is not working as the guidelines to identify and monitor hate speech are not proper and a bit vague. This has led to a wrongful ban on appropriate content while problematic content continues to exist on the platform.

Lack of adequate moderators, their limited knowledge on important policies and the bigger impact on communities are major issues. Although Facebook has employed a few local moderators, it is not enough to support its vast presence and the amount of content the platform generates.

Facebook is probably looking at temporary solutions instead of relying and partnering with subject matter experts to solve its security issues.

We believe that the task of regulating and monitoring content requires tremendous efforts and cannot be handled through a few boardroom discussions. A larger consideration of the communities and the respective policies need to be monitored closely to prevent such malpractices.

Facebook, Inc. Revenue (TTM)

Facebook, Inc. Revenue (TTM) | Facebook, Inc. Quote

 

Intense Scrutiny to Hurt Investor Confidence

Facebook’s increased data privacy issues attracted unnecessary attention and probe by regulatory authorities.

The Irish Data Protection Commission (DPC) is now investigating Facebook for allegedly violating General Data Protection Regulation (GDPR) across Europe. Additionally, the U.S. Federal Trade Commission (FTC) is also looking into the company’s data breaches, per Bloomberg.

Facebook has also received warning from the Indonesian government and its practices have been criticized by regulators from countries like Argentina, Brazil, Canada, Ireland, Latvia, Singapore, France, Belgium and the U.K.

Notably, the warning was not only directed at Facebook but also applicable for other key social media players such as Twitter (TWTR - Free Report) and Alphabet’s (GOOGL - Free Report) Google owned YouTube.

Facebook, which has already paid £500,000 in fines in the U.K because of the Cambridge Analytica scandal, is likely to face a fine of $1.63 billion from the European Union (EU) if the company is found to have violated Europe’s GDPR.

Although this Zacks Rank #3 (Hold) company has invested in improving transparency and security, it does not seem to be enough. This is evident from its declining popularity, while its competitor Snap (SNAP - Free Report) is gaining traction among younger users.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Will You Make a Fortune on the Shift to Electric Cars? 

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Facebook, Inc. (FB) - free report >>

Alphabet Inc. (GOOGL) - free report >>

Snap Inc. (SNAP) - free report >>

Twitter, Inc. (TWTR) - free report >>

More from Zacks Analyst Blog

You May Like