Facebook (FB) stock fell sharply Friday morning as German consumers have started to join the fray surrounding online privacy. The largest consumer protection organization in Germany said that it would be sending a lawsuit Facebook’s way if the social media giant refused to change its terms of service. Today, we’ll talk about the massive changes in online privacy we’ve seen recently, the German organization that’s demanding change in the social network’s terms of service and why, and finally, we’ll take a look at the big hit Facebook (FB) stocks took today as a result.
Online Privacy Is Changing
Last year, the world of internet privacy started to change. One of the biggest reasons for the change was a frightening revelation brought about by what’s now being called the Snowden Scandal. Edward Snowden leaked classified information that the United States Government wasn’t only spying on enemies. In fact, they were spying on allies, consumers, and their own government agencies. This news sent shock waves through the world of online privacy. As a matter of fact, the news that the NSA doesn’t seem to care about privacy has caused several tech companies including Apple (AAPL), SalesForce.com (CRM), and Amazon (AMZN) to start building data centers on European soil. Now, as consumers start to care more about the privacy of their data, we’re also starting to see lawsuits pop up!
About The Organization That’s Threatening Facebook (FB) And Why
The organization that sent the stiff warning to facebook is known as the VzBv in short or in full, The Federation of German Consumer Organizations. The group is more of an umbrella corporation that overshadows 41 of the largest consumer advocate agencies in Germany. In the demands they sent to Facebook (FB), they state that there are 19 clauses in the terms of service and data protection guidelines published by Facebook (FB) that violate German law. While we will see claims like this from time to time, the most shocking part of these claims is that they seem to be true. As a matter of fact, Heiko Maas, Germany’s Justice Minister openly supports the complaint and wants German users to be able to opt out of specific features without having to cancel their Facebook (FB) accounts entirely.
Facebook’s Reaction To The Demand
Facebook (FB) took a more surprised stance in their reaction to the complaint and informed the press that they are reviewing the complaint in more detail. They also stated that they have recently updated their policies to make them more clear. In a statement to the press, Facebook (FB) had the following to say…
They were surprised that the complaint “…focused on settled terms and features that have been part of Facebook and other online services for the past 10 years, such as real-name policies…We recently updated our terms and policies to make them more clear and concise, to reflect new product features and to highlight how we’re expanding people’s control over advertising…We’re confident the updated comply with applicable laws.”
How Facebook (FB) Stocks Reacted To The News
As mentioned above, Facebook (FB) stocks are down sharply today following the new complaint. The company’s stock price fell from a previous close of $80.41 per share to $79.54 per share by 10:45. Since then, the stock has fallen at a relatively slow and steady pace. It currently sits at $79.41 per share (1:10 PM).
What Are Your Thoughts
Do you think that this complaint will have any long term affect on Facebook’s stock price? Why or why not? Let me know in the comments below!