Facebook’s shares have fallen sharply, it is perhaps facing its biggest crisis since IPO. Meanwhile, Apple looks rosy.
Apple dips, Facebook slumps, as privacy becomes the new battleground
This is one of Apple’s unique selling points. This is why it got into a row with Amber Rudd. The Home Secretary wanted a back door into Apple communication tools to help in the fight against terrorism. But she did not get technology. If she had, she would have realised that once you create such a back door, you have no way of knowing who else might break in. Either the data is 100 per cent inaccessible or you risk third parties breaking into it and using it for various nefarious means.
Ironically, Ms Rudd also criticised Facebook for refusing to create a backdoor into WhatsApp.
I say ironic, because it is Facebook that is in the firing line, right now.
To be clear, it is not Facebook that used data to manipulate voters. It was, or so it is alleged, Cambridge Analytics, using data in ways for which it did not have permission.
In fact, or so it is alleged, Aleksandr Kogan, a university lecturer developed a Facebook quiz and sold the data to Cambridge Analytics.
In a statement, Facebook said that Kogan “gained access to this information in a legitimate way and through the proper channels” but “did not subsequently abide by our rules.”
The rules forbid the selling of that data to third parties.
But the public are not buying it.
And with good reason, under GDPR - General Data Protection Regulation - coming into force on May 25th, a company is responsible and accountable for the data it collects, even when it is used by third parties.
End of secrets versus end of privacy
Facebook boss, Mark Zuckerberg, once said we are seeing “the end of privacy.” In fact, he may have not actually said what he meant. The end of secrets may be a final outcome from the data age we are entering, this may be a good thing. It will certainly be good if we enter the age of transparency. But privacy is a quite different thing.
And in the West, ever since George Orwell’s book 1984 was published, there has been an almost obsessive fear over the notion we are being spied on.
And while Facebook makes all the appropriate noises about privacy, and compliance with GDPR, there is a sense that a public, brought up on a kind of Orwellian angst, doesn’t trust it.
For that reason, shares in the company have fallen sharply - down from $184 at the end of last week to $172 as I write. That means shares lost around $30 billion - that’s the cost of this saga so far.
If Facebook is not careful, Orwellian angst may be its undoing.
Rest of techs
Meanwhile, the Apple share price is down a tad. There is no good reason for the fall. The company had revealed plans to bring the manufacturing of its screen display in-house, that has hit the share price of certain suppliers, and you can understand that. But for Apple, this is a good move.
It had also spent a tiny fraction of its cash reserves on buying Texture, a digital magazine subscription service in the US and has said it is spending almost $1 billion a year on content as it tries to take on Netflix and Amazon Prime.
These are positives - after-all, the company had to spend its money somehow and seems to believe building more multi-billion strings to its corporate bow is better than giving cash to shareholders.
But, it’s privacy where Apple is so strong - the Facebook debacle should have led to a higher Apple share price, I suspect the markets have not cottoned on to this.
And before I close today. There is some nonsense flying around the media which has even hit the share price of some techs. A self-driving Uber car had tragically killed a pedestrian. That is sad, I am very sorry. But, the media and public reaction misses the point. Local authorities say the accident was not the fault of the car and would probably have happened if a human was driving. Alas, driving is a dangerous and deadly pursuit. 1.3 million people die in road traffic accidents every year worldwide. Is it that every accident involving an autonomous car is going to be greeted by a chorus of luddites, singing of the joys of what driving used to be like, in the good old, extremely dangerous, days? Autonomous cars will save lives, not cost them. Share price falls seen as a result of this tragic accident will reverse.
These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees.