Facebook, Inc. (NASDAQ:FB) is involved in yet another data scandal. It was reported on Tuesday that the social media giant had agreements with four telecom companies in China that gave them access to user data. The agreement on its own was not unusual as Facebook also gave access to other manufacturers as well, including Apple Inc. (NASDAQ:AAPL), BlackBerry Ltd (TSX:BB)(NYSE:BB), Amazon.com, Inc. (NASDAQ:AMZN), and others.
However, what’s concerning for the public is that one of the Chinese companies involved has close ties to the Chinese government. Huawei has been flagged by U.S. intelligence and as a result some telecom companies have decided not to sell its latest phone amid worries that the phones may not be secure. Although Facebook claims that the data that Huawei had access to remained on the phone and was not transferred to its servers, it’s uncertain how Facebook can guarantee that did not happen.
This is just the latest data-related scandal that Facebook has been involved in as earlier this year it ran into trouble when it was discovered that information on millions of accounts was collected by Cambridge Analytica.
The big question is whether or not this really matters to investors.
As outraged as investors and the public claimed to be and although the share price plummeted after the Cambridge Analytica scandal, the stock has more than recovered since the incident. The share price has risen 9% in the past month and is now only a few dollars away from its 52-week high.
The stock still remains a good buy and any dip as a result of this latest scandal could create a great buying opportunity for investors.
