#SocialStocks: FTC Urged to Uphold New Children’s Privacy Policies

Another Facebook whistleblower could testify, Twitter divests MoPub and other notable stories from this week. Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

DAMAGE CONTROL: 

A Facebook (FB) executive said Sunday that the company would introduce new measures on its apps to prompt teens away from harmful content, as U..S. lawmakers scrutinize how Facebook and subsidiaries like Instagram affect young people’s mental health, according to Reuters. “We’re going to introduce something which I think will make a considerable difference, which is where our systems see that the teenager is looking at the same content over and over again and it’s content which may not be conducive to their well-being, we will nudge them to look at other content,” Nick Clegg, Facebook’s vice president of global affairs, said. In addition, “we’re introducing something called, ‘take a break,’ where we will be prompting teens to just simply just take a break from using Instagram,” Clegg added. As major tech companies have announced policy changes intended to protect young users online in response to a new United Kingdom children’s privacy law, Senator Edward Markey and Representatives Kathy Castor and Lori Trahan wrote to the Federal Trade Commission urging the agency to use its full authority-including its authority under Section 5 of the FTC Act-to ensure these companies comply with their new policies. The Age Appropriate Design Code took effect in the U.K. this September and requires online services available to children and teens to meet 15 key children’s privacy standards, many of which are similar to legislative proposals to update Senator Markey’s 1998 law, the Children’s Online Privacy and Protection Act, in the United States. “The need to protect young people from privacy threats online is more urgent than ever. Since 2015, American children have spent almost five hours each day watching their screens, and children’s and teens’ daily screen time has increased by 50 percent or more during the coronavirus pandemic,” the lawmakers wrote in their letter. “We therefore encourage you to use every tool at your disposal to vigilantly scrutinize companies’ data practices and ensure that they abide by their public commitments.”

NEW TO TWITTER: 

Twitter (TWTR) announced the Twitter Spaces Spark Program, a three-month accelerator initiative that’s designed to discover and reward great Spaces on Twitter with financial, technical, and marketing support. “We’re looking for emerging Creators who are passionate about the live social audio format and interested in creating recurring programming on Spaces,” the company said. “Whether you have an existing show you’ve been hosting for weeks, or a brand new conversation you want to try, we want to support you.” “We’re seeking audio Creators who are hosting interesting Twitter Spaces today, or have a creative idea for a new conversation they want to launch,” Twitter added. “We’re looking to support a diverse slate of Creators who tap into unique communities and conversations happening on Twitter. If accepted into the program, we’ll look for you to host your Space twice each week over the course of three months.” Additionally, Twitter Support tweeted Monday, “The option to remove a follower is now rolling out to everyone on web.” The tweet comes after Twitter Support tweeted on September 7, that, “We’re making it easier to be the curator of your own followers list. Now testing on web: remove a follower without blocking them. To remove a follower, go to your profile and click ‘Followers’, then click the three dot icon and select ‘Remove this follower’.”

RUN IT BACK: 

A second potential whistleblower who previously worked at Facebook has emerged. Sophie Zhang, who worked as a data scientist at Facebook for nearly three years, says she is willing to testify before Congress about her former employer and had also passed on documentation about the company to a U.S. law enforcement agency, CNN’s Donie O’Sullivan reported. Zhang wrote a memo when she was fired by Facebook last year detailing how she believed the company was not doing enough to tackle hate and misinformation, and told CNN on Sunday that she was encouraged that there appeared to be bipartisan support for action relating to the protection of children online following Facebook whistleblower Frances Haugen’s testimony to a Senate subcommittee last week. In regards to the first whistleblower, Haugen said on Monday via Twitter that she will meet with the social media company’s Oversight Board. “I have accepted the invitation to brief the Facebook Oversight Board about what I learned while working there. Facebook has lied to the board repeatedly, and I am looking forward to sharing the truth with them.”

WHERE LOYALTIES LIE: 

Facebook policy communications director Andy Stone is making enemies as the company takes heat in Washington in order to please CEO Mark Zuckerberg, The New York Post’s Theo Wayt reported, citing insiders. According to the report, Stone’s caustic communications strategy is to please Zuckerberg, who sold over $45M in common stock on October 4 and 5 following an option expiry, and COO Sheryl Sandberg, even if that means angering the politicians who want to regulate Facebook and the reporters who cover it. “The target audience is Mark and Sheryl and Facebook employees,” said a former Facebook employee who worked with Stone. “It doesn’t really matter if reporters or the general public like them.” This week, Stone has reportedly questioned the credibility of Haugen, clashed with Senator Marsha Blackburn and gone back and forth with with reporters, accusing them of lessening the company’s image.  “Just pointing out the fact that @FrancesHaugen did not work on child safety or Instagram or research these issues and has no direct knowledge of the topic from her work at Facebook,” Stone tweeted while Haugen was currently testifying.

BIG, BAD AND HERE TO STAY: 

Everyone has a complaint about Facebook, but there’s far less will to force a change, Eric Savitz wrote in this week’s edition of Barron’s. No question, Facebook continues to receive intense criticism from both sides of the political spectrum, along with growing scrutiny from regulators here and abroad, the author noted. There is growing buzz that Facebook is having a Big Tobacco moment, that Facebook is proving to be toxic, like cigarettes. But for all the buzz, the betting here is that almost nothing will happen, Savitz argues. Further, this past week’s service outage could be a reminder of Facebook’s staying power, the publication adds. For example, Tigress Financial analyst Ivan Feinseth raised the firm’s price target on the social media Giant and reiterated a Strong Buy rating on the shares. He believes the company’s near-term controversy after a former product manager leaked internal documents to The Wall Street Journal before appearing on 60 Minutes and before Congress, which has sent the stock down over 15% from its all-time high hit in early September, creates a long-term buying opportunity. Facebook will continue to benefit from the “massive growth” in digital advertising, the ongoing shift to social commerce and enhancing its applications with increasing communications and e-commerce functionality, argues Feinseth, who sees the company being able to “overcome controversy and continue to create long-term shareholder value.”

THE BIRD LOSES A FEATHER: 

Twitter announced that it has entered into a definitive agreement to sell MoPub to AppLovin (APP) for $1.05B in cash. Twitter said that it believes AppLovin is well positioned to grow and evolve MoPub’s network of customers in the rapidly changing in-app industry. In 2020, MoPub generated approximately $188M in annual revenue, which was reported in Data Licensing and Other. The company will provide additional details regarding the estimated future financial impact when it reports financial results for the third quarter on October 26, after market close. As a reminder, the company will record a charge to operations during the third quarter for the $809.5M litigation settlement it announced on September 20. Under the terms of the agreement, Twitter will provide certain services to AppLovin for a period of time post-close to enable an orderly transition for publishers and advertisers. The transaction, which was unanimously approved by the Twitter board of directors, is expected to close in the coming months, subject to customary closing conditions, including receipt of regulatory approval.

VR REBRAND: 

Facebook said in a statement: “When we launched Horizon’s invite-only beta last year, we started to build a creator-friendly space in VR with best-in-class social world-building tools. We’ve spent the past year developing those tools and improving them based on creator feedback. These early creators have grown the social experiences on the Horizon platform, and we’ve been amazed by their imagination and creativity on display. We’re excited to do more to support them, so starting today, we’re launching new initiatives to recognize the efforts of Horizon creators and continue to grow the creator and developer community. We’re announcing a $10 million Creator Fund to encourage more people to come build with us as we continue rolling out Horizon in beta. And as we grow the social experiences that are part of Horizon, we’re rolling out a new name for this experience: Horizon Worlds. Later this year, we’ll launch a series of creator competitions to reward people building the very best worlds in Horizon and who are taking advantage of the tools we offer. We’ll offer up to $10k in cash prizes for the first-, second- and third-place winners. We’ll also continue our Creator Accelerator Program, an application-based initiative designed to give people from diverse backgrounds an advanced crash course in Horizon Worlds creation.”

HOLIDAY SPIRIT: 

Beginning November 1, Facebook will host daily Live Shopping experiences on Facebook and Instagram where users “can find the latest gifts and exclusive deals, get advice from fellow shoppers and connect with celebrities, creators and brand experts,” according to the company. “Some of the biggest brands including Benefit Cosmetics [LVMUY], Cocokind, Macy’s [M], Paintbox Nails, Tanya Taylor, Ulta Beauty [ULTA], Vuori and Walmart [WMT] will host live videos that allow you to shop the latest holiday trends from the comfort of your home.” The social media giant also said that it is “bringing back #BuyBlack Friday to highlight Black-owned businesses and are providing weekly #BuyBlack collections on Facebook and Instagram.” There will also be promotions like 20% off a first purchase and free shipping, when completing an eligible purchase directly on the apps. Also, customers can also refer up to 10 friends to take advantage of an exclusive deal. The Shop tabs on Facebook and Instagram for Holiday Picks will be available on November 1.

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Originally Posted on October 13, 2021 – #SocialStocks: FTC Urged to Uphold New Children’s Privacy Policies