In an unprecedented act of contrition, Facebook co-founder Mark Zuckerberg has apologized for the data scandal which has affected up to 87 million users. But the problems could run much deeper than that.
Already the Chief Technology Officer Mike Schroepfer has confirmed that the social media group removed an online tool that allowed people to enter phone numbers or email addresses to find users.
“Malicious actors have abused these features to scrape public profile information,” he said in a blog post after mapping out sweeping changes.
His remarks triggered concerns that this would have made it possible for these “malicious actors” to discover the identities and collect information on most of Facebook’s two billion users worldwide, including up to 500 million in the Asia-Pacific region.
It also comes at a time when the internet company is struggling to protect data gathered on people who use the social media website and app.
On Wednesday, CEO Zuckerberg admitted ‘mistakes were made’ after Cambridge Analytica, a British political consultancy allegedly hired by President Donald Trump’s team and other Republicans, may have improperly obtained detailed Facebook information on 87 million people, including more than 3.5 million from Southeast Asia.
During a conference call with the media, he stressed that the Nasdaq-listed group had not seen “any meaningful impact” on user activity or ad sales since the storm broke, but stressed “it’s not good if people are unhappy” with the company.
“When you’re building something like Facebook that is unprecedented in the world, there are going to be things that you mess up,” Zuckerberg said, adding it was important to learn from mistakes. “Knowing what I know today, clearly we should have done more.”
With about 500 million users in the Asia-Pacific region, including at least 300 million in Southeast Asia, the privacy problems connected to the company’s search tools will tarnish the image of one of the big beasts in the tech world.
Fresh evidence has started to emerge of Facebook’s failure to protect personal information while generating billions of dollars in revenue from the data.
Indeed, the feature that allowed users to enter phone numbers or email addresses into the platform’s search tool to find other people has since been removed.
“Given the scale and sophistication of the activity we’ve seen, we believe most people on Facebook could have had their public profile scraped in this way. So, we have now disabled this feature,” the group, which has a market capitalization of nearly US$450 billion, said in a statement.
Significantly, Zuckerberg has defended the company’s policy of gathering user data for a business model which allows advertisers to use information and targeting tools to reach specific groups.
“People tell us that if they’re going to see ads they want the ads to be good,” he said.
Still, the markets reacted quickly to the privacy breach with Facebook’s share price dipping just under 1% to close at $155.10 on Wednesday.
Morgan Stanley, the Wall Street investment bank, also cut its price target for the company to $200 from $230, citing concerns about ad sales.
“Following [Facebook’s] recent data [and] privacy issues and its announcement that it will end partnerships with third-party data providers, we sense growing investor [unease] about near-term ad revenue,” Brian Nowak, an analyst at Morgan Stanley, wrote in a note.
Bank of America Merrill Lynch seems to be facing a similar dilemma.
While the New York-based financial firm retained a ‘buy rating’ for the online group, it was removed from its US1 top ideas list.
“Facebook is being [taken off] as we are making an adjustment based on the overall composition of the list,” the Bank of America Merrill Lynch’s research team said in a CNBC report.
In the end, saving face for Facebook looks like being an uphill battle.