Sep 05, 2019 (IAM Newswire via COMTEX) -- While yet another data leak threatens to derail the Facebook privacy public relations campaign, Google, Microsoft and Twitter are also dealing with their own set of performance issues.
Earlier this year, Facebook Inc. /zigman2/quotes/205064656/composite FB -0.16% quietly confirmed that millions of unencrypted Instagram passwords had been stored in plain text online so the new out breach really couldn’t have come at a worse time for Facebook. The company confirmed Wednesday its data breach that exposed phone numbers of 419M users. Zack Whittaker revealed that multiple databases across several geographies included 133 million records on U.S.-based users, 18 million from the U.K., and more than 50 million records from Vietnam. TechCrunch reported that the online server where the information was stored was not password protected.
The records were likely amassed using a tool that Facebook disabled in April 2018 in the aftermath of the Cambridge Analytica controversy when the company announced it was making changes to better protect people's information. The revelations showed how Facebook's lax approach to privacy had allowed a political consultancy to obtain personal information from tens of millions of profiles. However, Facebook's spokesperson insists that data was old and that there is no evidence that Facebook accounts were compromised." Facebook acknowledged in 2018 that they know they have more work to do, and this massive and quite embarrassing leak only confirms it.
Yet the company has remained strong despite its intensifying competitors, but the impact of these blows remains to be seen. It wasn't not a good summer for the social media pioneer, also considering the July's $5 billion penalty it settled with The Federal Trade Commission (FTC). But this company surely had no shortage of controversies since its inception. And strangely, its users and investors weren't scared off. Even when the scandal first broke in March 2018, its stock quickly recovered and the business model wasn’t adversely affected. Investors simply count on costs of going forward. Even if these privacy issues damage its bottom line considering 98% of Facebook's revenues come from ads, the company has already shown the strength and perseverance of its brand.
Things aren't boring at Microsoft Corporation /zigman2/quotes/207732364/composite MSFT +1.02% either as the company issued also on Wednesday a new warning regarding its new Windows 10 that definitely continues to be a minefield for users. Strangely, the company choose to make the announcement only on Twitter! So, the bug is out but only Twitter users were deemed worthy to be addressed. For a bug which can consume almost half the PC's CPU and waste a significant portion of battery life, that seems like an odd decision to make. In April, Microsoft promised to up its game but last month users have seen Windows 10 updates run aground and updates break Bluetooth connections. In August, Microsoft also acknowledged new dents and vulnerabilities in every version of Windows 10 and that even two Steam exploits were able to compromise Windows security. It would be a shame for poor customer service to jeopardize the company's positive trend and expanding net margin. As a reminder, Microsoft's growth in the Intelligent Cloud business made its stock go up by 231% over the last five years.
Twitter /zigman2/quotes/203180645/composite TWTR -1.99% on Wednesday also announced that it was temporarily disabling the ability for users to send tweets through SMS, or text messages, due to "vulnerabilities that need to be addressed by mobile carriers" or simply because its CEO's account was hacked. Hopefully, they'll resolve these privacy issues soon not to break their more than favorable two-year track as the company's stock has been silently making gains under the media radar. Moreover, the company surpassed both its Q1 and Q2 earnings estimates in 2019. Its worst times definitely seem behind, all the way in 2016, as Twitter is now thought of by many analysts as undervalued. Privacy issues aside, the current positive trend shows Twitter is just warming up.
Also on Wednesday, Google /zigman2/quotes/202490156/composite GOOGL +1.08% reached a settlement with FTC to pay the largest ever penalty of $170 million under the Children's Online Protection Act to settle accusations that YouTube broke the law when collected user information from kids to fuel its behavioral advertising business. Things have gone south for Google since The Data Protection Commission started investigating its practices in May. There's also new evidence submitted to Irish regulators, suggesting that the company is using hidden web pages and secretly feeding personal data to advertisers. If true, this would mean that Google is undermining its own policies and circumventing EU privacy regulations that require consent and transparency. In response, Google said Wednesday it doesn’t serve “personalized ads or send bid requests to bidders without user consent."
Google claims to be investing in systems to detect phishing and hacking attempts so they can identify foreign interference on its platforms and protect candidates' campaigns from digital attacks. Yet new evidence suggests that Google could be "exploiting personal data without sufficient control or concern over data protection".
Although we still don't know if the government is up to the task of regulating these giants, it's safe to say all of them have a lot to work on as these are the companies who really need to lead by example. The truth is that data gets forgotten about and mistakes can happen - but it seems these giants might be using up their credit.