Facebook (FB - Free Report) continues to be under fire over privacy concerns. A study by Privacy International revealed that 20 out of 34 Android apps disclosed sensitive user information to the company.
As soon as users opened these popular apps, the pre-installed Facebook Software Development Kit (SDK) automatically collected details of user activity in the app without their consent. Some of the apps include Kayak, Spotify (SPOT - Free Report) , Duolingo and TripAdvisor (TRIP - Free Report) among others.
Not only is the data available to Facebook but is also vulnerable to misuse by hackers. Notably, the user data shared with Facebook is through Alphabet’s (GOOGL - Free Report) Google advertising ID.
The data collection practices clearly violate European Union's General Data Protection Regulation (GDPR), which came into effect on May 25, 2018. The regulation places tight control on how companies deal with user data.
Though Facebook updated its SDK to collect data with users’ permission after GDPR took effect, many popular apps are yet to incorporate the new update. Moreover, some developers complain that the data collection issue persists even with the new SDK in place.
However, Facebook has not shied away from making aggressive investments to secure its platform and undertaken numerous measures in the past year.
We believe the company’s efforts to enhance security will boost user confidence and attract more ad dollars, which contribute significantly to the top line (98.6% of third-quarter 2018 revenues).
Facebook, Inc. Revenue (TTM)