Facebook Tanks as Wall Street Learns of Lawsuit and More Data Scandal Related Issues

Social media giant Facebook saw its shares slide over 7% on Wednesday on news that the company is facing a lawsuit by attorney general of the District of Columbia.

Attorney General Karl Racine alleges Facebook of wide-ranging privacy violations.

“Facebook’s consumers reasonably expect that Facebook will take appropriate steps to maintain and protect their data,” the lawsuit states.

“Facebook tells them as much, promising that it requires applications to respect a Facebook consumer’s privacy. Facebook has failed to live up to this commitment.”

Earlier this week the New York Times also reported that Facebook shared even more data than previously thought with companies.

Through a review of internal documents and interviews with over 50 former employees, the Times found that this data reportedly included access to users private messages. The Times report also said that Facebook allowed some companies, including Spotify, Bing and the Royal Bank of Canada to access user’s private messages. The published report even alleged that companies were allowed to view certain information from users’ Facebook friends without explicit consent.

In a blog post Facebook defended itself and said, “To be clear: none of these partnerships or features gave companies access to information without people’s permission, nor did they violate our 2012 settlement with the FTC.”

Facebook’s VP of Product Partnerships, Ime Archibong, wrote:

In the past day, we’ve been accused of disclosing people’s private messages to partners without their knowledge. That’s not true – and we wanted to provide more facts about our messaging partnerships.

We worked closely with four partners to integrate messaging capabilities into their products so people could message their Facebook friends — but only if they chose to use Facebook Login. These experiences are common in our industry — think of being able to have Alexa read your email aloud or to read your email on Apple’s Mail app.

People could message their friends about what they were listening to on Spotify or watching on Netflix, share folders on Dropbox, or get receipts from money transfers through the Royal Bank of Canada app. These experiences were publicly discussed. And they were clear to users and only available when people logged into these services with Facebook. However, they were experimental and have now been shut down for nearly three years.

Why did the messaging partners have read/write/delete messaging access?
That was the point of this feature — for the messaging partners mentioned above, we worked with them to build messaging integrations into their apps so people could send messages to their Facebook friends.

Specifically, we made it possible for people to message their friends what music they were listening to in Spotify or watching on Netflix directly from the Spotify or Netflix apps (see screen shots below), to message links to Dropbox folders (like a collection of photographs) from the Dropbox app, and to message receipts from money transfers through the Royal Bank of Canada app.

In order for you to write a message to a Facebook friend from within Spotify, for instance, we needed to give Spotify “write access.” For you to be able to read messages back, we needed Spotify to have “read access.”

“Delete access” meant that if you deleted a message from within Spotify, it would also delete from Facebook. No third party was reading your private messages, or writing messages to your friends without your permission. Many news stories imply we were shipping over private messages to partners, which is not correct.

These partnerships were agreed via extensive negotiations and documentation, detailing how the third party would use the API, and what data they could and couldn’t access.

It was also this week that the attorney general’s office of Washington, D.C. said it was going to sue the company for “failing to protect its users’ data.”

Disclaimer: We have no position in Facebook, Inc. Common Stock (NASDAQ: FB) and have not been compensated for this article.