Just when it looked like Facebook, Inc (NASDAQ:FB) might be mounting a bit of a recovery after its latest data scandal, it’s right back into a newer, bigger one. This week we learned from the New York Times that the social media giant was less than truthful when it came to protecting sensitive user data. The latest concerns surround the company giving preferential treatment to big tech companies, including Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN).
In addition to information on a user’s friends, private messages were also made available to some companies. Users would not have been aware of the information and that it was given without consent. It is arguably the biggest scandal to date for the company. Earlier in the year, Facebook was involved in a data scandal involving Cambridge Analytica, where information on millions of accounts was improperly accessed.
Whether Facebook will be able to recover the trust of its users again is the big question. While there may not be any real alternative for users to go to, privacy and data-related concerns are becoming more and more prevalent for consumers and are more than just an afterthought these days.
Year to date, Facebook’s stock has dropped by 20%, and after this news, more could be on the way. Not only could users shut down their accounts, but advertisers may choose to steer clear of the troubled tech company as well. Question marks will surely surround the company’s leadership, and without a convincing movement to put these controversies to rest once and for all, I wouldn’t expect the stock to recover from this anytime soon.
